Brief Exercise 4-6
The income statement for Weeping Willow Golf Club for the month ending July 31 shows Service Revenue $16,400, Salaries and Wages Expense $8,200, Maintenance and Repairs Expense $2,500, and Net Income $5,700.
Post the entries to the revenue and expense accounts, and complete the closing process for these accounts using the three-column form of account.
Service Revenue
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Date
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Explanation
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Ref
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Debit
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Credit
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Balance
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7/31
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Balance
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7/31
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Closing entry
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Salaries and Wages Expense
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Date
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Explanation
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Ref
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Debit
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Credit
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Balance
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7/31
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Balance
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7/31
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Closing entry
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Maintenance and Repairs Expense
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Date
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Explanation
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Ref
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Debit
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Credit
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Balance
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7/31
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Balance
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7/31
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Closing entry
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Brief Exercise 4-9
At Creighton Company, the following errors were discovered after the transactions had been journalized and posted.
1.
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A collection on account from a customer for $870 was recorded as a debit to Cash $870 and a credit to Service Revenue $870.
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2.
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The purchase of store supplies on account for $1,570 was recorded as a debit to Supplies $1,750 and a credit to Accounts Payable $1,750.
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Prepare the correcting entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No.
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Account Titles and Explanation
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Debit
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Credit
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1.
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2.
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Brief Exercise 4-11
Match each of the following accounts to its proper balance sheet classification.
Accounts
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Balance Sheet Classification
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Accounts Payable
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Accounts receivable
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Accumulated depreciation—buildings
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Buildings
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Cash
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Copyrights
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Income taxes payable
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Debt investments (long-term)
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Land
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Inventory
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Patents
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Supplies
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Exercise 4-7
Kay Magill Company had the following adjusted trial balance.
KAY MAGILL COMPANY Adjusted Trial Balance For the Month Ended June 30, 2014
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Adjusted Trial Balance
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Account Titles
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Debit
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Credit
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Cash
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$
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Accounts Receivable
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Supplies
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Accounts Payable
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$
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Unearned Service Revenue
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Owner’s Capital
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Owner’s Drawings
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Service Revenue
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Salaries and Wages Expense
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Miscellaneous Expense
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Supplies Expense
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Salaries and Wages Payable
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Total
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$
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$
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Condition gt requires numbers instead of “null” and “0”
Prepare closing entries at June 30, 2014. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No.
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Account Titles and Explanation
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Debit
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Credit
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1.
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(To close revenue account.)
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2.
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(To close expense accounts)
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3.
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(To close net income / (loss).)
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4.
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(To close drawings)
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Condition gt requires numbers instead of “null” and “0”
Prepare a post-closing trial balance.
KAY MAGILL COMPANY Post-Closing Trial Balance For the Month Ended June 30, 2014
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Debit
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Credit
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$
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$
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Total
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$
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$
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Exercise 4-8
Plevin Company ended its fiscal year on July 31, 2014. The company’s adjusted trial balance as of the end of its fiscal year is as shown below.
PLEVIN COMPANY Adjusted Trial Balance July 31, 2014
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No.
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Account Titles
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Debit
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Credit
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101
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Cash
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$
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112
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Accounts Receivable
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|
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157
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Equipment
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158
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Accumulated Depreciation—Equip.
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$
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201
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Accounts Payable
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208
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Unearned Rent Revenue
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301
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Owner’s Capital
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306
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Owner’s Drawings
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400
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Service Revenue
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429
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Rent Revenue
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711
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Depreciation Expense
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726
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Salaries and Wages Expense
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732
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Utilities Expense
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Total
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$
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$
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Condition gt requires numbers instead of “null” and “0”
Prepare the closing entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
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Account Titles and Explanation
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Debit
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Credit
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July 31
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(To close revenue accounts.)
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July 31
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(To close expense accounts.)
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July 31
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(To close net income / ( loss).)
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July 31
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(To close drawings.)
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Condition gt requires numbers instead of “null” and “0”
Post to Owner’s Capital and Income Summary accounts. (Post entries in the order of journal entries presented in the previous part.)
Owner’s Capital
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No. 301
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Date
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Explanation
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Ref
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Debit
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Credit
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Balance
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July 31
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J15
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Income Summary
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No. 350
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Date
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Explanation
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Ref
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Debit
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Credit
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Balance
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July 31
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Condition gt requires numbers instead of “null” and “0”
Prepare a post-closing trial balance at July 31.
PLEVIN COMPANY Post-Closing Trial Balance July 31, 2014
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Debit
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Credit
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$
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$
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Total
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$
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$
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Exercise 4-10
Condition gt requires numbers instead of “null” and “0”
Janis Engle has prepared the following list of statements about the accounting cycle.
Identify each statement as true or false.
1.
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“Journalize the transactions” is the first step in the accounting cycle.
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2.
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Reversing entries are a required step in the accounting cycle.
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3.
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Correcting entries do not have to be part of the accounting cycle.
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4.
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If a worksheet is prepared, some steps of the accounting cycle are incorporated into the worksheet.
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5.
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The accounting cycle begins with the analysis of business transactions and ends with the preparation of a post-closing trial balance.
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6.
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All steps of the accounting cycle occur daily during the accounting period.
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7.
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The step of “post to the ledger accounts” occurs before the step of “journalize the transactions.”
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8.
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Closing entries must be prepared before financial statements can be prepared.
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