Chapter 4: Q7RQ (page 216)
Identify two asset categories on the classified balance sheet, and give examples of each category.
Current assets includes cash, accounts receivable, inventories and so on. Intangible assets includes goodwill, patent, copyrights and so on.
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End of the Line Montana Refrigeration has these account balances at December 31, 2018: Notes Payable, long-term \( 9,200 Accounts Payable \) 3,600 Prepaid Rent 2,500 Accounts Receivable 6,600 Salaries Payable 2,600 Cash 3,500 Service Revenue 15,600 Depreciation Expense—Equip. 400 Office Supplies 1,300 Equipment 24,000 Accumulated Depreciation—Equip. 4,000 Common Stock 6,000 Advertising Expense 900 Rent Expense 1,800 Requirements 1. Calculate End of the Line Montana Refrigeration’s current ratio. 2. How much in current assets does End of the Line Montana Refrigeration have for every dollar of current liabilities that it owes?
The adjusted trial balance for Green Advertising Services is presented below: Account Title Office Supplies Cash Debit Credit Accounts Receivable Building Accumulated Depreciation—Building Furniture Accumulated Depreciation—Furniture Land Salaries Payable Accounts Payable Unearned Revenue Common Stock Retained Earnings Dividends Service Revenue Salaries Expense Supplies Expense Depreciation Expense—Building Balance \( 14,000 \) 195,200 \( 195,200 18,400 14,100 \) 36,100 19,600 7,200 10,600 30,000 31,400 16,000 18,300 49,800 8,400 28,600 2,900 1,300 13,500 15,800 6,500 47,900 Depreciation Expense—Furniture Advertising Expense Total GREEN ADVERTISING SERVICES Adjusted Trial Balance December 31, 2018 Requirements 1. Prepare the income statement for the year ending December 31, 2018. 2. Prepare the statement of retained earnings for the year ending December 31, 2018. 3. Prepare the classified balance sheet as of December 31, 2018. Use the report form
Mark’s Bowling Alley’s adjusted trial balance as of December 31, 2018, is presented below:
Requirements
1. Prepare the closing entries for Mark’s Bowling Alley.
2. Prepare a post-closing trial balance.
3. Compute the current ratio for Mark’s Bowling Alley
How could a worksheet help in preparing financial statements?
This comprehensive problem is a continuation of Comprehensive Problem 1. Murphy Delivery Service has completed closing entries and the accounting cycle for 2018. The business is now ready to record January 2019 transactions. Jan. 3 Collected \(200 cash from customer on account. 5 Purchased office supplies on account, \)1,000. 12 Performed delivery services for a customer and received \(3,000 cash. 15 Paid employee salary, including the amount owed on December 31, \)4,100. 18 Performed delivery services on account, \(1,350. 20 Paid \)300 on account. 24 Purchased fuel for the truck, paying \(200 cash. 27 Completed the remaining work due for Unearned Revenue. 28 Paid office rent, \)2,200, for the month of January. 30 Collected \(3,000 in advance for delivery service to be performed later. 31 Cash dividends of \)1,500 were paid to stockholders. Requirements 1. Record each January transaction in the journal. Explanations are not required. 2. Post the transactions in the T-accounts. Don’t forget to use the December 31, 2018, ending balances as appropriate. 3. Prepare an unadjusted trial balance as of January 31, 2019. 4. Prepare a worksheet as of January 31, 2019 (optional). 5. Journalize the adjusting entries using the following adjustment data and also by reviewing the journal entries prepared in Requirement 1. Post adjusting entries to the T-accounts. CHAPTER 4 246 chapter 4 Adjustment data: a. Office Supplies on hand, \(600. b. Accrued Service Revenue, \)1,800. c. Accrued Salaries Expense, $500. d. Prepaid Insurance for the month has expired. e. Depreciation was recorded on the truck for the month. 6. Prepare an adjusted trial balance as of January 31, 2019. 7. Prepare Murphy Delivery Service’s income statement and statement of retained earnings for the month ended January 31, 2019, and the classified balance sheet on that date. On the income statement, list expenses in decreasing order by amount—that is, the largest expense first, the smallest expense last. 8. Calculate the following ratios as of January 31, 2019, for Murphy Delivery Service: return on assets, debt ratio, and current ratio.
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