會計學原理19版練習答案：Chapter_04_Completing the Accounting Cycle

1、Chapter 4Completing the Accounting CycleQUESTIONS 1.Closing entries affect temporary accounts: revenues, expenses, withdrawals, and income summary. Specifically, closing entries at the end of an accounting period prepare the revenues (and gains), expenses (and losses), and withdrawals accounts for t

2、he next period by giving them zero balances. Closing entries also update the owners capital account for the events of the year just finished. Closing entries do not affect the asset and liability accounts (permanent accounts).2.(i) Closing entries prepare the temporary accountsrevenue and expense (a

3、nd gain and loss) accounts and withdrawalsfor the next period by giving them zero balances. (ii) Closing entries also update the owners capital account for the events of the period just completed.3.The four-step closing entry process is: (i) close the revenue (and gain) accounts to the Income Summar

4、y account, (ii) close the expense (and loss) accounts to the Income Summary account, (iii) close the Income Summary account to the owners capital account, and (iv) close the withdrawals account to the owners capital account. 4.The Income Summary account is used to summarize the periods revenues and

5、expenses. As a result, it temporarily has a balance equal to the net income (or net loss) for the period. (Instructor note: Closing can be accomplished without the Income Summary account by closing revenue and expense accounts directly to the owners capital account.)5.Yes, an error would have occurr

6、ed because a post-closing trial balance should only include permanent accounts, and Depreciation Expense is a temporary account that should have been closed. If an expense appears on the post-closing trial balance, the amounts of net income, total assets, and total equity are all in error (overstate

7、d).6.A work sheet can be used to collect and organize data for preparing (i) adjusting entries, (ii) closing entries, and (iii) financial statements. A work sheet can also be used for what if analysis, for help with audit adjustments, and for preparing interim financial statements.7.The adjustments

8、in the Adjustments columns of a work sheet are identified by letters to link the debits with the credits to ensure that the entries are complete and in balance (debits = credits) and for reference purposes (audit trail). The letters can also be used to identify the reasons for the entries and help s

9、implify preparation of the actual adjusting journal entries.8.A companys operating cycle is the normal time between paying cash for merchandise inventory or for employee salaries in providing customer services and the receipt of cash from customers in exchange for those products or services.9.Assets

10、 on a typical classified balance sheet include current assets and noncurrent assetswhere noncurrent assets usually include long-term investments, plant assets, and intangible assets. Liabilities are typically classified as current and noncurrent. Note that the terms short-term and long-term are some

11、times used for current and noncurrent.10.Unearned revenue is reported as a liabilityusually a current liability.11.Plant assets (also called property, plant and equipment or long-lived assets) are tangible long-lived assets used to produce or sell goods or services.12.AReversing entries simplify sub

12、sequent entries for accrued expenses and accrued revenues by eliminating the need to record the removal of the accrued liability or accrued receivable when the accrual is settled. 13.AThe following reversing entry could be made as of the first day of the next accounting period, after the post-closin

13、g trial balance is completed and financial statements are prepared. Salaries Payable.500 Salaries Expense.50014.The five categories of noncurrent assets on Best Buys balance sheet are: Property and Equipment, Goodwill, Tradenames, Long-term investments, and Other assets.15.Circuit City has seven cur

14、rent liability accounts: Merchandise payable, Expenses payable, Accrued expenses and other current liabilities, Accrued compensation, Accrued income taxes, Short-term debt, and Current installments of long-term debt.16.RadioShack has four current asset accounts: Cash and cash equivalents; Accounts a

15、nd notes receivable, net; Inventories; and Other current assets.17.The closing entry recorded on September 30, 2006, to transfer the companys net income to its Retained Earnings account would likely have been (in millions):Income Summary . 1,989Retained Earnings.1,989QUICK STUDIESQuick Study 4-1 (10

16、 minutes)Income Summary balance after closing revenues and expensesRevenues: $42,000 + $8,000.=$50,000Cr.Expenses: $31,000 + $11,000 + $5,000 .=- 47,000Dr.Credit balance (equal to net income).=$ 3,000Cr.M. Irvine, Capital account balance after all closing entriesBeginning balance .$35,000Plus net in

17、come. 3,00038,000Less withdrawals . 9,200Ending balance.$28,800Quick Study 4-2 (5 minutes)1.(i)Analyzing transactions and events.2.(c)Journalizing transactions and events.3.(e)Posting the journal entries.4.(b)Preparing the unadjusted trial balance.5.(f)Journalizing and posting adjusting entries.6.(g

18、)Preparing the adjusted trial balance. 7.(a)Preparing the financial statements.8.(h)Journalizing and posting closing entries.9.(d)Preparing the post-closing trial balance.Quick Study 4-3 (10 minutes)1.E2.C3.E4.A5.B6.F7.A8.DQuick Study 4-4 (10 minutes)Current assetsCash .$ 7,000Accounts receivable.18

19、,000Office supplies .2,860Prepaid insurance. 3,500Total current assets.$31,360Current liabilitiesAccounts payable .$11,000Unearned services revenue. 3,000Total current liabilities.$14,000Current ratio = $31,360 / $14,000 = 2.24Quick Study 4-5 (10 minutes)Computation of J. Fischer, Capital for the De

20、c. 31, 2009, balance sheetJ. Fischer, Capital (beginning) . $ 36,000Add net income ($90,000 - $61,000). 29,00065,000Less withdrawals. (18,000)J. Fischer, Capital (ending). $ 47,000 Quick Study 4-6 (5 minutes)a.Id.Bb.Be.Bc.If.BQuick Study 4-7 (5 minutes)a.1d.5b.3e.4c.2Quick Study 4-8 (20 minutes)EDGA

21、RDO COMPANYWork SheetUnadjustedTrial BalanceAdjustmentsAdjustedTrial BalanceIncomeStatementBalance SheetAccount TitleDr.Cr.Dr.Cr.Dr.Cr.Dr.Cr.Dr.Cr.Prepaid Rent. 4,000(a)8003,2003,200Services Revenue.65,000(b)95065,95065,950Wages expense.30,000(c)75030,75030,750Accounts Receivable.(b)950950950Wages P

22、ayable.(c)750750750Rent Expense.(a)800800800Quick Study 4-9 (15 minutes)Dec. 31 Services Revenue.26,000Income Summary .26,000To close the revenue account. 31 Income Summary.20,000Wages Expense.16,800Rent Expense .3,200 To close the expense accounts. 31 Income Summary. 6,000P. Simms, Capital. 6,000To

23、 close Income Summary account. 31 P. Simms, Capital.1,600P. Simms, Withdrawals .1,600To close the withdrawals account.Quick Study 4-10 (5 minutes)The only account from QS 4-9 that would appear in post-closing trial balance is P. Simms, Capital.Quick Study 4-11A (10 minutes)2009Jan. 1 Management Fees

24、 Earned .24,000Accounts Receivable .24,000To reverse accrued revenue. 16 Cash .37,500Management Fees Earned .37,500To record collection of management fees.EXERCISESExercise 4-1 (35 minutes)Closing entries(1)Services Revenue.401 114,530Income Summary .901114,530To close the revenue account.(2)Income

25、Summary.901 63,360Depreciation Expense.60317,000Salaries Expense.62232,500Insurance Expense .6374,420Rent Expense .6409,440To close the expense accounts.(3)Income Summary.901 51,170R. Cruz, Capital.30151,170To close Income Summary account.(4)R. Cruz, Capital.301 46,770R. Cruz, Withdrawals .30246,770

26、To close the withdrawals account.Posted accountsR. Cruz, CapitalNo. 301Salaries ExpenseNo. 622Date PRDebitCreditBalanceDate PRDebitCreditBalanceMar.3165,000Mar.3132,500(3)51,170116,170(2)32,5000(4)46,77069,400R. Cruz, WithdrawalsNo. 302Insurance ExpenseNo. 637Date PRDebitCreditBalanceDate PRDebitCre

27、ditBalanceMar.3146,770Mar.314,420(4)46,7700(2)4,4200Services RevenueNo. 401Rent ExpenseNo. 640Date PRDebitCreditBalanceDate PRDebitCreditBalanceMar.31114,530Mar.319,440(1)114,5300(2)9,4400Depreciation ExpenseNo. 603Income SummaryNo. 901Date PRDebitCreditBalanceDate PRDebitCreditBalanceMar.3117,000(1

28、)114,530114,530(2)17,0000(2)63,36051,170(3)51,1700Exercise 4-2 (40 minutes)Santara Marketing CompanyWork SheetAdjustedTrial BalanceClosing Entry InformationPost-ClosingTrial BalanceNo.Account TitleDr.Cr.Dr.Cr.Dr.Cr.101Cash. 11,90011,900106Accounts receivable.24,00024,000153Equipment.41,00041,000154A

29、ccumulated depre- ciationEquipment.16,50016,500193Franchise.30,00030,000201Accounts payable.14,00014,000209Salaries payable.3,2003,200233Unearned fees.2,6002,600301T. Santara, Capital.66,701(4)14,400(3)18,29970,600302T. Santara, Withdrawals.14,400(4)14,400401Marketing fees earned.83,000(1)83,000611D

30、epreciation expense Equipment.11,000(2)11,000622Salaries expense.33,034(2)33,034640Rent expense.12,616(2)12,616677Miscellaneous expense.8,051(2)8,051901Income summary.(2)64,701(1)83,000_(3) 18,299_Totals.186,001186,001180,400180,400106,900106,900Exercise 4-3 (30 minutes)1.2009Dec. 31 Services Revenu

31、e.404 37,200Income Summary .90137,200To close the revenue account. 31Income Summary.901 28,968Depreciation ExpenseEquipment .6122,000Salaries Expense.62221,687Insurance Expense .6371,562Rent Expense .6402,492Supplies Expense .6521,227To close the expense accounts. 31Income Summary.901 8,232N. Ferrar

32、a, Capital .3018,232To close Income Summary account. 31N. Ferrara, Capital.301 6,000N. Ferrara, Withdrawals.3026,000To close the withdrawals account.2.FERRARA COMPANYPost-Closing Trial BalanceDecember 31, 2009DebitCreditCash.$18,000 Supplies.13,900 Prepaid insurance.2,000Equipment .23,000Accumulated

33、 depreciationEquipment .$ 6,500N. Ferrara, Capital*. 50,400 Totals .$56,900 $56,900 *$48,168 + $8,232 - $6,000 = $50,400Exercise 4-4 (20 minutes)RESOURCE TRUCKING COMPANYIncome StatementFor Year Ended December 31, 2009Trucking fees earned.$121,000 ExpensesDepreciation expenseTrucks. $20,727Salaries

34、expense. 56,749Office supplies expense.6,655Repairs expenseTrucks . 10,406Total expenses . 94,537 Net income.$ 26,463RESOURCE TRUCKING COMPANYStatement of Owners EquityFor Year Ended December 31, 2009J. Reso, Capital, December 31, 2008.$161,901Add:Net income. 26,463188,364Less: Withdrawals. (20,000)

35、 J. Reso, Capital, December 31, 2009.$168,364 Exercise 4-5 (20 minutes)RESOURCE TRUCKING COMPANYBalance SheetDecember 31, 2009AssetsCurrent assets Cash .$ 5,800 Accounts receivable .17,500 Office supplies . 3,000 Total current assets.26,300 Plant assets Trucks . $156,000 Accumulated depreciation-Tru

36、cks . (32,136)123,864 Land. 85,000 Total plant assets. 208,864 Total assets .$235,164 LiabilitiesCurrent liabilities Accounts payable .$ 9,800 Interest payable. 4,000 Total current liabilities.13,800 Long-term notes payable . 53,000 Total liabilities .66,800 EquityJ. Reso, Capital*. 168,364 Total li

37、abilities and equity .$235,164 *From Exercise 4-4Exercise 4-6 (15 minutes)Note: Current assets and current liability totals are from Exercise 4-4 or 4-5Current ratio = = = 1.9Interpretation: Resource Trucking Companys current ratio of 1.9 exceeds the industry average of 1.5. This implies the company

38、 is in a slightly better liquidity position than its competitors. Moreover, if we review the makeup of the current ratio, we see that current assets consist primarily of cash and accounts receivable. The existence of these more liquid assets is a positive attribute for liquidity purposes.Exercise 4-

39、7 (15 minutes)CurrentAssetsCurrent LiabilitiesCurrent RatioCase 1$ 76,000/$ 26,666=2.85Case 2101,080/64,351=1.57Case 342,863/41,204=1.04Case 482,308/69,156=1.19Case 558,444/84,638=0.69Analysis: Company 1 is in the strongest liquidity position. It has about $2.85 of current assets for each $1 of curr

40、ent liabilities. The only potential concern is that Company 1 may be carrying too much in current assets that could be better spent on more productive assets (note that its remaining competitors current ratios range from 1.57 to 0.69).Current assetsCurrent liabilities$26,300$13,800Exercise 4-8 (20 m

41、inutes)Instructor note: Entries are shown without an account reference column because no posting is required.(a)Insurance ExpenseOffice Equipment.470Insurance ExpenseStore Equipment.509 Prepaid Insurance.979To record expired insurance.(b)Office Supplies Expense .1,729Office Supplies.1,729To record c

42、onsumed supplies.(c)Depreciation ExpenseOffice Equipment. .3,300Accumulated DepreciationOffice Equip.3,300To record depreciation of office equip.(d)Interest Receivable .636Interest Revenue.636To record accrued interest income.(e)Office Salaries Expense .716Salaries Payable .716To record accrued sala

43、ries.Exercise 4-9 (15 minutes)1.C5.C9.B13.D2.D6.C10.C14.B3.C7.A11.C15.D4.A8.D12.A16.AExercise 4-10 (20 minutes)Linn CompanyWork SheetAdjustedTrial BalanceIncome StatementBalance Sheet & Statement ofOwners EquityNo.AccountDr.Cr.Dr.Cr.Dr.Cr.101Cash.8,2008,200106Accounts receivable.35,83435,834153T

44、rucks.41,50041,500154Accumulated depreciation Trucks.16,68316,683183Land.30,00030,000201Accounts payable.19,10619,106209Salaries payable.4,3704,370233Unearned fees.3,7703,770301D. Linn Capital.69,01269,012302D. Linn, Withdrawals.15,53415,534401Plumbing fees earned.84,00084,000611Depreciation expense

45、 Trucks.5,5615,561622Salaries expense.39,31239,312640Rent expense.12,76812,768677Miscellaneous expense. 8,232_ 8,232_Totals.196,941196,94165,87384,000131,068112,941Net income.18,127_ 18,127Totals.84,00084,000131,068131,068Exercise 4-11 (25 minutes)1.Work Sheet Account TitleDebitCreditRent earned .90

46、,000Salaries expense.39,960Insurance expense.5,670Office supplies expense.13,230Bike repair expense .2,790Depreciation expenseBikes. 17,190 Totals.78,84090,000Net income. 11,160 Totals. 90,00090,0002. Closing entries(1)Rent Earned.90,000Income Summary .90,000To close the revenue account.(2)Income Su

47、mmary.78,840Salaries Expense.39,960Insurance Expense .5,670 Office Supplies Expense .13,230 Bike Repair Expense.2,790 Depreciation ExpenseBikes .17,190 To close the expense accounts.(3)Income Summary.11,160C. Johnson, Capital .11,160To close Income Summary account.Exercise 4-12 (30 minutes) Part 1SA

48、NTAGA DELIVERY COMPANYWork SheetFor Year Ended December 31, 2009UnadjustedTrial BalanceAdjustmentsAdjustedTrial BalanceIncomeStatementBalance Sheet and Statement of Owners EqutiyAccount TitleDr.Cr.Dr.Cr.Dr.Cr.Dr.Cr.Dr.Cr.Cash.15,00015,00015,000Accounts receivable.33,00033,00033,000Office supplies.4,

49、000(c)3,500500500Trucks.340,000340,000340,000Accum. DepreciationTrucks.112,000(a)16,000128,000128,000Land.150,000150,000150,000Accounts payable.23,55023,55023,550Interest payable.6,000(b)2,0008,0008,000Long-term notes payable.104,000104,000104,000D. Santaga Capital.272,770272,770272,770D. Santaga, W

50、ithdrawals.38,00038,00038,000Delivery fees earned.274,350274,350274,350Depreciation expenseTrucks.48,000(a)16,00064,00064,000Salaries expense.128,670128,670128,670Office supplies expense.14,000(c)3,50017,50017,500Interest expense.6,000(b)2,0008,0008,000Repairs expenseTrucks. 16,000_ 16,000_ 16,000_

51、_Totals.792,670792,67021,50021,500810,670810,670234,170274,350576,500 536,320Net Income. 40,180_ 40,180Totals.274,350274,350576,500 576,500Exercise 4-12 (Continued)2.Closing entries Delivery Fees Earned .274,350Income Summary .274,350To close the revenue account. Income Summary.234,170Depreciation E

52、xpenseTrucks .64,000Salaries Expense.128,670Office Supplies Expense .17,500Interest Expense .8,000 Repairs ExpenseTrucks.16,000 To close the expense accounts. Income Summary.40,180D. Santaga, Capital.40,180To close Income Summary account. D. Santaga, Capital .38,000D. Santaga, Withdrawals .38,000To

53、close the withdrawals account.D. Santaga, Capital on the balance sheetBeginning balance. $272,770Add: Net income. 40,180 312,950Less: Withdrawals. (38,000)Ending balance.$274,950Exercise 4-13A (30 minutes)1. Adjusting entries Oct. 31 Rent Expense.3,300Rent Payable.3,300To record accrued rent expense

54、. 31 Rent Receivable.1,050Rent Earned.1,050To record accrued rent income.2. Subsequent entries without reversing Nov. 5Rent Payable.3,300Rent Expense.3,300Cash .6,600To record payment of 2 months rent. 8Cash.2,100Rent Receivable .1,050Rent Earned.1,050To record collection of 2 months rent.3. Reversi

55、ng entries and subsequent entries Nov. 1Rent Payable.3,300Rent Expense .3,300To reverse accrual of rent expense. 1Rent Earned.1,050Rent Receivable .1,050To reverse accrual of rent income. 5Rent Expense.6,600Cash .6,600To record payment of 2 months rent. 8Cash.2,100Rent Earned.2,100To record collecti

56、on of 2 months rent.Exercise 4-14A (10 minutes)Reversing entries are appropriate for accounting adjustments (a) and (e) Sept. 1 Service Fees Earned.4,500Accounts Receivable.4,500To reverse accrued revenues. 1 Salaries Payable .2,700Salaries Expense.2,700To reverse accrued salaries.PROBLEM SET AProbl

57、em 4-1A (15 minutes) 1.C6.C11.B16.C2.A7.Z12.Z17.F3.C8.A13.A18.E4.A9.E14.A19.A5.C10.E15.E20.GProblem 4-2A (90 minutes) INSTRUCTOR NOTE:Ledger accounts (as prepared per Part 1) are shown after Part 7 as they would appear after all entries are posted.Part 2 Transactions for April April 1 Cash.101 32,00

58、0Computer Equipment.167 26,000J. Nozomi, Capital .30158,000Owner invested in the business. 2 Rent Expense.640 1,300Cash .1011,300Paid one months rent. 3 Office Supplies.1242,500Cash .1012,500Acquired office supplies. 10 Prepaid Insurance.1282,502Cash .1012,502Paid 12 months premium in advance. 14 Sa

59、laries Expense.6222,300Cash .1012,300Paid two weeks salaries. 24 Cash.10116,000Commissions Earned .40516,000Collected commissions from airlines. 28 Salaries Expense.6222,400Cash .1012,400Paid two weeks salaries. 29 Repairs Expense.684750Cash .101750Repaired the computer. 30 Telephone Expense.688550C

60、ash .101550Paid the telephone bill. 30 J. Nozomi, Withdrawals.3021,200Cash .1011,200Owner withdrew cash.Problem 4-2A (Continued)Part 3ADVENTURE TRAVELUnadjusted Trial BalanceApril 30, 2009No.Account TitleDebitCredit101Cash.$34,498106Accounts receivable.0124Office supplies.2,500128Prepaid insurance.2,502