Chapter 4: Q16RQ (page 216)
What are the steps in the closing process?
The steps in the closing process are as follows:
Close dividends account
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The unadjusted trial balance of Data Solution at November 30, 2018, follows: DATA SOLUTION Unadjusted Trial Balance November 30, 2018 Account Title Prepaid Rent Cash Debit Credit Accounts Receivable Office Supplies Equipment Accumulated Depreciation—Equipment Accounts Payable Salaries Payable Common Stock Dividends Service Revenue Depreciation Expense—Equipment Salaries Expense Rent Expense Utilities Expense Supplies Expense Balance \( 4,400 \) 48,300 \( 48,300 5,100 \) 1,500 30,200 32,900 8,800 2,900 2,100 3,100 1,800 3,100 700 Additional information at November 30, 2018: a. Accrued Service Revenue, \(800. b. Depreciation, \)350. c. Accrued Salaries Expense, \(650. d. Prepaid Rent expired, \)700. e. Office Supplies used, $550. Requirements 1. Complete Data Solution’s worksheet for the month ended November 30, 2018. 2. How much was net income for November?
How could a worksheet help in preparing financial statements?
For each account listed, identify whether the account would appear on the post-closing trial balance. Indicate either yes or no.
17. Service Revenue
The adjusted trial balance of Stone Sign Company follows: Account Title Prepaid Rent Cash Debit Credit Office Supplies Equipment Accumulated Depreciation—Equipment Accounts Payable Salaries Payable Unearned Revenue Notes Payable (long-term) Common Stock Dividends Service Revenue Salaries Expense Rent Expense Depreciation Expense—Equipment Supplies Expense Balance \( 15,400 \) 85,500 \( 85,500 100 \) 7,000 3,800 4,300 4,200 800 48,800 17,300 1,400 3,700 1,500 1,400 60,000 300 400 Utilities Expense 600 Total STONE SIGN COMPANY Adjusted Trial Balance January 31, 2018 Requirements 1. Assume Stone Sign Company has a January 31 year-end. Journalize Stone’s closing entries at January 31. 2. How much net income or net loss did Stone Sign Company earn for the year ended January 31? How can you tell?
The unadjusted trial balance of Watson Anvils at December 31, 2018, and the data for the adjustments follow: WATSON ANVILS Unadjusted Trial Balance December 31, 2018 Account Title Prepaid Rent Cash Debit Credit Accounts Receivable Office Supplies Equiment Accumulated Depreciation—Equipment Accounts Payable Salaries Payable Unearned Revenue Dividends Common Stock Service Revenue Salaries Expense Rent Expense Depreciation Expense—Equipment Supplies Expense Total Balance \( 13,560 \) 72,400 \( 72,400 5,600 4,600 12,000 Retained Earnings 17,600 19,000 17,000 2,140 2,800 \) 11,000 7,200 30,000 2,300. Adjustment data: a. Unearned Revenue still unearned at December 31, \(3,600. b. Prepaid Rent still in force at December 31, \)2,000. c. Office Supplies used, \(600. d. Depreciation, \)400. e. Accrued Salaries Expense at December 31, $180. Requirements 1. Open the T-accounts using the balances in the unadjusted trial balance. 2. Complete the worksheet for the year ended December 31, 2018 (optional). 3. Prepare the adjusting entries, and post to the accounts. 4. Prepare an adjusted trial balance. 5. Prepare the income statement, the statement of retained earnings, and the classified balance sheet in report form. 6. Prepare the closing entries, and post to the accounts. 7. Prepare a post-closing trial balance. 8. Calculate the current ratio for the company.
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