Accounting basics (trial balance sheet, income statement sheet, closing the year sheet etc..To be announced on Tuesday 10:10 AM eastern time (Toronto)online test.
BRIEF EXERCISE 4.4 Oct 31 Service Revenue...„ ............................ 130,000 Income Summary .-....-------.......-,-..,. To close revenue account. 31 Income summary Repairs Expense„„ ..,..................... Rent Expense ................... I ............. Salaries Expense To close expense accounts. 31 Income summary ......... N. Mosquera, Capital 105'000 25,000 To close Income Summary. 31 N. Mosquera, Capital .......................... 45,000 N. Mosquera, Drawings ....... „ ........ To close Drawings account. 130,000 25,000 45,000 L01 BT: AP Difficulty: M Time: 10 min. AACSB: None CPA: cpa-tool CM: Reporting BRIEF EXERCISE 4.5 DANIEL'S DOG GROOMING Post-Closing Trial Balance November 30, 2021 Debit Credit Cash ............................. [[.,.[[ ..,.........,..................... $ 12,300 Prepaid expenses Equipment Accumulated depreciationuequipment Accounts payable unearned revenue .[[ .......... [[ ............ I .............. I.., D. Blaschuk, capital ............. I ....... I .............. I ....... 4,100 60,000 $15'000 9'500 15,250 36.650a-S- LO 1 BT: AP Difficulty: S Time: 10 min. AACSB: None CPA: cpa-tool CM: Reporting BRIEF EXERCISE 4.6 The proper sequencing of the required steps in the accounting cycle is as follows: 1. Analyze business transactions 2. Journalize the transactions 3. Posttothe ledgeraccounts 4. Prepareatrial balance 5. Journalize and postthe adjusting entries 6. Prepare an adjusted trial balance 7, Prepare the financial statements 8. Journalize and postthe closing entries 9. Prepare a post-closing trial balance Filling in the blanks, the answers are 9, 6,1, 4, 2, 8, 7, 5, 3. LO 2 BT: K Difriculty: C Time: 10 min. AACSB: None CPA: cpa-tool CM: Reporting BRIEF EXERCISE 4.7 1. Service Revenue ..................,.................. 750 Accounts Receivable ...................... To correct entry for collection on account. 2[ Unearned Revenue.„ ..., I ..,........... ]„„.„... 600 Service Revenue To correct entry for recording of invoice. 3. Roch H6bert, Drawings ............. „ ........... 500 Salaries Expense ............................. To correct for error in drawings by owner. LO 2 BT: AP Difficulty: C Time: 10 min. AACSB: None CPA: cpa-tool CM: Reporting BRIEF EXERCISE 4.8 Accounts payable Accounts receivable .............. „ ......... „ ...... „..„ Cash -I-..I..I .............................. L. Dawn, capital .................... „ ........ [[-.[„ ,---.-.-.- Patents ""." ....----.-. ` ........--.---..-....-.--.--....- salaries payableE ............... I..I ............... EEEEE„ .... Merchandise inventory ........ „„ ....................... Short-term investments .. Accumulated depreciation -equipment ...... Buildingsll......-...||.||..I...-.I.II--..-I......-..I.....'... Land Notes payable Supplies Equipment Prepaid expenses ........ I.I ,............................... LO 3 BT: K Difficulty: S Time: 10 min. AACSB: None CPA: cpa-tool CM: Reporting 750 600 500 BRIEF EXERCISE 4.15 a. (1) Working capital = Current assets -Current liabilities Working capital 2020 = $33,510 -$24,800 = $8,710 Working capital 2021 = $35,100 -$24,460 = $10,640 (2) Current ratio = Current assets + Current liabilities Current ratio 2020 = $33,510 + $24,800 = 1[35:1 Current ratio 2021 = $35,100 + $24,460 = 1.43=1 (3) Acid-test ratio = (Cash + Accounts Receivable + Short-term Investments) + Current liabilities Acid-testratio 2020 =$20,430+$24,800 =0.82=1 Acidltestratio 2021 =$22,680i-$24,460 =0.93:1 b. All three measures of Drew Co.'s liquidity show improvement in 2021 compared to 2020. EXERCISE 4.9 a. Dec. 31 AccountsReceivable ...... „.„... 10,440 Service Revenue...„.„„ ....... 10,440 To record revenue for services performed. 31 Insurance Expensel ........ „.„„. prepaid Insurance .I ............ 1($7,440 + 12 x 7 = $4,340) To record insurance expense. 31 Depreciation Expense „ ...... „.. 4,340 2,780 Accumulated Depreciation -Equipment .I ...... I ..-.-.. I -..... To record depreciation expense. 31 Supplies Expense2 .................. 3,510 Supplies'.--II...II|.........-I...... 2($5,260 -$1,750 = $3,510) To record supplies used. 31 Interest Receivable ................. Interest Revenue3 ............. „ 3[($|2,000 x 4°/a) + 12 x 3 = $120] To accrue interest expense. Accounts Receivable 120 4'340 2,780 3'510 120 Bal. 6,250 Dec. 31 10,440 Bal.