1. Closing entries are journalized and posted
a. before the financial statements are prepared.
b. after the financial statements are prepared.
c. at management's discretion.
d. at the end of each interim accounting period.
2. Using the following income statement for the month of June 2018 of Delgado Enterprises to answer the following question.
Revenues $7,000
Expenses:
Wages Expense $2,000
Rent Expense 1,000
Supplies Expense 300
Advertising Expense 200
Insurance Expense 100
Total expenses 3,600
______
Net income $3,400
The entry to close the revenue account includes a:
a. debit to Retained Earnings for $7,000.
b. credit to Dividend for $7,000.
c. debit to Income Summary for $7,000.
d. credit to Income Summary for $7,000.
1. Closing entries are journalized and posted
a. before the financial statements are prepared.
b. after the financial statements are prepared.
c. at management's discretion.
d. at the end of each interim accounting period.
2. Using the following income statement for the month of June 2018 of Delgado Enterprises to answer the following question.
Revenues $7,000
Expenses:
Wages Expense $2,000
Rent Expense 1,000
Supplies Expense 300
Advertising Expense 200
Insurance Expense 100
Total expenses 3,600
______
Net income $3,400
The entry to close the revenue account includes a:
a. debit to Retained Earnings for $7,000.
b. credit to Dividend for $7,000.
c. debit to Income Summary for $7,000.
d. credit to Income Summary for $7,000.
Related questions
| Salaries Expense | Service Revenue | |||||||
| 6/10 | 3,200 | 6/30 | 8,800 | 6/30 | 15,100 | 6/15 | 6,700 | |
| 6/28 | 5,600 | 6/24 | 8,400 | |||||
| Retained Earnings | Supplies Expense | |||||||
| 6/30 | 2,500 | 6/1 | 12,000 | 6/12 | 600 | 6/30 | 1,300 | |
| 6/30 | 2,000 | 6/24 | 700 | |||||
| Bal. | 11,500 | |||||||
| Rent Expense | Dividends | |||||||
| 6/1 | 3,000 | 6/30 | 3,000 | 6/13 | 1,000 | 6/30 | 2,500 | |
| 6/25 | 1,500 | |||||||
Instructions
(a) Prepare the closing entries that were made. (For multiple debit/credit entries, listamounts from largest to smallest eg 10, 5, 3, 2.)
| Description/Account | Debit | Credit |
| SuppliesExpenseRent ExpenseRetained EarningsDividendsService RevenueIncomeSummarySalaries Expense | ||
| ServiceRevenueDividendsSalaries ExpenseSupplies ExpenseRentExpenseRetained EarningsIncome Summary | ||
| (To closerevenue.) | ||
| ServiceRevenueSupplies ExpenseRent ExpenseSalaries ExpenseRetainedEarningsDividendsIncome Summary | ||
| SuppliesExpenseService RevenueRent ExpenseRetained EarningsIncomeSummaryDividendsSalaries Expense | ||
| RetainedEarningsService RevenueDividendsRent ExpenseIncome SummarySalariesExpenseSupplies Expense | ||
| SuppliesExpenseDividendsService RevenueRetained EarningsIncomeSummarySalaries ExpenseRent Expense | ||
| (To closeexpenses.) | ||
| DividendsRetainedEarningsSupplies ExpenseIncome SummaryService RevenueSalariesExpenseRent Expense | ||
| RetainedEarningsRent ExpenseSalaries ExpenseService RevenueSuppliesExpenseIncome SummaryDividends | ||
| (To close netincome to retained earnings.) | ||
| ServiceRevenueDividendsRent ExpenseRetained EarningsIncome SummarySalariesExpenseSupplies Expense | ||
| RetainedEarningsIncome SummaryRent ExpenseSalaries ExpenseSuppliesExpenseDividendsService Revenue | ||
| (To closedividends to capital.) |
(b) Post the closing entries to Income Summary.
| Income Summary | |||
| June 30 | June 30 | ||
| June30 | 2,000 | ||
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The Colby Group has the following unadjusted trial balance as of August 31, 2019.
| Collby Group | ||
| Unadjusted Trial Balance | ||
| August 31, 2019 | ||
| Accounts Title | Debit | Credit |
| Cash | $17,300 | |
| Accounts Receivable | $37,000 | |
| Supplies | $7,400 | |
| Prepaid Insurance | $1,900 | |
| Equipment | $196,000 | |
| Notes Payable | $97,600 | |
| Accounts Payable | $26,000 | |
| Terry Collby, Capital | $129,150 | |
| Terry Collby, Drawings | $56,000 | |
| Fee Earned | $454,450 | |
| Wages Expense | $270,000 | |
| Rent Expense | $51,800 | |
| Advertising Expense | $25,200 | |
| Miscellaneous Expense | $5,100 | |
| Total | $667,700 | $707,200 |
The debit and credit totals are not equal as a result of the following errors:
a. The cash entered on the trial balance was understated by $6,000.
b. A cash receipt of $5,600 was posted as a debit to Cash of $6,500.
c. A debit of $11,000 to Accounts Receivable was not posted.
d. A return of $150 of defective supplies was erroneously posted as a $1,500 credit to Supplies.
e. An insurance policy acquired at a cost of $1,200 was posted as a credit to Prepaid Insurance.
f. The balance of Notes Payable was understated by $20,000.
g. A credit of $4,800 in Accounts Payable was overlooked when determining the balance of the account.
h. A debit of $7,000 for withdrawal by the owner was posted as a credit to Terry Colby, Capital.
i. The balance of $58,100 in Rent Expense was entered as $51,800 in the trial balance.
j. Gas, Electricity, and Water Expense, with a balance of $24,150, was omitted from the trial balance.
Required:
1. Prepare a corrected unadjusted trial balance as of August 31, 2019.
2. Does the fact that the unadjusted trial balance in (1) is balanced means that there are no errors in the accounts?
Question 16
Corresponds to CLO 3(d) Hemmingway Corporation paid salaries of$5,000 and advertising expense of $2,000. Which of the followingjournal entries correctly records these expenses?
Debit: Cash $7,000 | ||
Debit: Salaries/Wages Expense$5,000 | ||
Debit: Salaries/Wages Expense$5,000 | ||
Debit: Salaries/Wages Expense$5,000 |
3 points
Question 17
Corresponds to CLO 4(a) Which of the following statements iscorrect regarding accrued revenues and unearned revenues, beforeadjusting entries have been made?
Accrued revenues have not been earned and unearned revenues havebeen earned. | ||
Accrued revenues have been paid and unearned revenues havenot. | ||
Accrued revenues have not been recorded and unearned revenueshave been recorded. | ||
Accrued revenues have been recorded and unearned revenues havebeen recorded. |
3 points
Question 18
Corresponds to CLO 4(b) Hudson Law Corporation received $5,500cash for legal services to be rendered in the future. The fullamount was credited to the liability account Unearned ServiceRevenue. At the end of the period, Hudson determines that $3,000 ofthe legal services have been rendered. The appropriate adjustingjournal entry to be made at the end of the period is:
debit Unearned Service Revenue, $3,000; credit Cash, $3,000. | ||
debit Unearned Service Revenue, $3,000; credit Service Revenue,$3,000. | ||
debit Unearned Service Revenue, $2,500; credit Service Revenue,$2,500. | ||
debit Service Revenue, $2,500; credit Unearned Service Revenue,$2,500. |
3 points
Question 19
Corresponds to CLO 4(c) Ace Corporation purchased officesupplies costing $13,000 and debited Office Supplies for the fullamount. At the end of the accounting period, a physical count ofoffice supplies revealed $2,700 still on hand. The appropriateadjusting journal entry to be made at the end of the period is:
debit Office Supplies Expense, $10,300; credit Office Supplies,$10,300. | ||
debit Office Supplies, $10,300; credit Office Supplies Expense,$10,300. | ||
debit Office Supplies Expense, $2,700; credit Office Supplies,$2,700. | ||
debit Office Supplies, $2,700; credit Office Supplies Expense,$2,700. |
3 points
Question 20
Corresponds to CLO 4(d) On September 1, Northgate paid $18,000to Evans Management Company for 12 months of rent beginning onSeptember 1. The appropriate journal entry was made to record thistransaction. If financial statements are prepared for the 9 monthsended September 30, the adjusting entry to be made by Northgateis:
debit Rent Expense, $13,500; credit Prepaid Rent, $13,500. | ||
debit Prepaid Rent, $1,500; credit Rent Revenue, $1,500. | ||
debit Prepaid Rent, $1,500; credit Rent Expense, $1,500. | ||
debit Rent Expense, $1,500; credit Prepaid Rent, $1,500. |
3 points
Question 21
Corresponds to CLO 5(a) Lennox Corporation purchased a newdelivery truck for 35,000. The sales taxes are $2,700. The logo ispainted on the side of the truck for $800. The truck's annuallicense is $200. Annual insurance on the truck is $1,300. Whatshould Lennox record as the cost of the new truck?
$40,000 | ||
$38,500 | ||
$37,700 | ||
$35,000 |
3 points
Question 22
Corresponds to CLO 5(b) On April 1, 2013, Ballard Corporationpurchased equipment for $65,000. It is estimated that the equipmentwill have a $5,000 salvage value at the end of its 5 year usefullife. If Ballard uses the straight-line method of depreciation,what is the accumulated depreciation at December 31, 2013?
$13,000 | ||
$12,000 | ||
$9,750 | ||
$9,000 |
3 points
Question 23
Corresponds to CLO 5(c) Tyree Company purchased equipment with acost of $90,000 and an estimated salvage value of $18,000. Theequipment is expected to produce 150,000 units over its estimateduseful life of 10 years. If Tyree uses the units-of-activitymethod, what is the depreciation cost per unit to be used incalculating depreciation?
$1.67 | ||
$0.48 | ||
$2.08 | ||
$0.60 |
3 points
Question 24
Corresponds to CLO 5(d) Kerns Company purchased equipment with acost of $200,000 and an estimated salvage value of $10,000. Theequipment has an estimated useful life of 10 years. If Kerns usesthe double-declining balance method, what is the annualdepreciation rate to be used in calculating depreciation?
5% | ||
10% | ||
20% | ||
40% |
3 points
Question 25
Corresponds to CLO 6(a) Marshall Machinery made a sale for$150,000 on March 31. The customer is sent a statement on April 6and payment is received on April 15. Marshall prepares March'smonthly internal financial statements on April 20. Marshall followsGAAP and applies the revenue recognition principle. When is the$150,000 considered to be earned?
March 31 | ||
April 6 | ||
April 15 | ||
April 20 |
