Question : 36) Using the abbreviations below, indicate which financial statement(s) would : 1253177

 

36) Using the abbreviations below, indicate which financial statement(s) would report each of the following line items. Some items may appear on more than one statement.

 

IS = Income statement

OE = Statement of changes in shareholders’ equity

BS = Balance sheet

CF = Statement of cash flows

NONE = the item does not appear on any of the financial statements

 

Cash flow from operating activities

 

Sales revenue

 

Cash

 

Net income

 

Depreciation expense

 

Profit margin on sales ratio

 

Prepaid rent

 

Rent expense

 

Salaries payable

 

Salaries expense

 

Accumulated depreciation

 

Retained earnings

 

 

 

37) Selected data from Olympia, Inc.’s accounting system are provided below. All balances are BEFORE year-end adjustments and all data relate to the year ended Dec. 31, 2011. Complete the chart below to show the balances in each of the accounts AFTER the appropriate adjustments have been made, using the following additional information:

 

a. The note was issued on October 31, 2011 at 12%. Both interest and principal are due on April 1, 2012.

b. The equipment was purchased on January 1, 2010. It has a seven-year estimated useful life with a $5,000 estimated residual value.

c. $300 of the supplies were used during the year.

d. The prepaid insurance balance relates to a $7,200, 12-month policy purchased on April 1, 2011.

e. $20,000 of the unearned revenue is now earned.

f. The salaries expense account balance does not include $10,000 of employee salaries earned but unpaid.

 

 

Balance before

adjustment

Balance after

adjustment

Notes payable

$50,000

$

Supplies

$500

$

Prepaid insurance

$7,200

$

Equipment

$75,000

$

Accumulated depreciation

$(20,000)

$

Unearned revenue

$30,000

$

Salaries payable

$0

$

Revenue

$200,000

$

Salaries expense

$(65,000)

$

Interest expense

$0

$

Depreciation expense

$0

$

Supplies expense

$0

$

Insurance expense

$0

$

Interest payable

$0

$

 

38) Selected data from RuthCo.’s accounting system are provided below. All balances are BEFORE year-end adjustments and all data relate to the year ended December 31, 2011. Determine the amount that will be reported for each of the items in the table below, after the appropriate adjustments have been made using the following information. Also indicate the financial statement where each item appears, using IS for the income statement and BS for the balance sheet. The table does NOT include all accounts that will be adjusted.

a.A $40,000 note payable has been unpaid all year and bears interest at 9%.

b.Equipment that was owned and used all year has a historical cost of $35,000, a 6-year estimated useful life, and a $5,000 estimated residual value.

c.$400 of the supplies were consumed during the year.

d.The prepaid insurance balance relates to a 12-month policy purchased on July 1, 2011.

e.$18,000 of the unearned revenue is now earned.

f.Salaries expense does not include $15,000 of employee salaries that have been earned but not yet paid.

 

 

Item

Balance BEFORE

adjustment

Balance after

adjustment

Financial

statement

1.

Interest payable

$0

$

 

2.

Office supplies

$900

$

 

3.

Prepaid insurance

$6,000

$

 

4.

Accumulated depreciation

$(23,000)

$

 

5.

Unearned revenue

$20,000

$

 

6.

Salaries expense

$95,000

$