ch04 PDF

CHAPTER 4
Completing the Accounting Cycle

ASSIGNMENT CLASSIFICATION TABLE
Brief
Exercises
Do It!
Exercises
A
Problems
B
Problems
1, 2, 3,
4, 5
1, 2, 3
1, 2, 3, 5,
6, 17
1A, 2A, 3A,

4A, 5A
1B, 2B, 3B,

4B, 5B
Explain the process

of closing the books.
6, 7, 11,
12
4, 5, 6
4, 7, 8,
11, 19
1A, 2A, 3A,

4A, 5A
1B, 2B, 3B,

4B, 5B
*3.
Describe the content and

purpose of a post-closing
trial balance.
8, 9
4, 7, 8
1A, 2A, 3A,

4A, 5A
1B, 2B, 3B,

4B, 5B
*4.
State the required steps

in the accounting cycle.
10, 11, 12
10, 19
5A
5B
*5.
Explain the approaches

to preparing correcting
entries.
13
12, 13
6A
*6.
Identify the sections of a

classified statement of
financial position.
14, 15, 16,

17, 18, 19
10, 11
3, 9, 14, 15,
16, 17
1A, 2A, 3A,

4A, 5A
*7.
Prepare reversing entries.
10, 20, 21
12
Study Objectives
Questions
*1.
Prepare a worksheet.
*2.
3, 4
1B, 2B, 3B,

4B, 5B
18, 19
*Note: All asterisked Questions, Exercises, and Problems relate to material contained in the appendix *to the
chapter.
Copyright 2011 John Wiley & Sons, Inc.
Weygandt, IFRS, 1/e, Solutions Manual
(For Instructor Use Only)
4-1
ASSIGNMENT CHARACTERISTICS TABLE

Problem
Number
Description
Difficulty
Level
Time Allotted
(min.)
Simple
4050
1A
Prepare worksheet, financial statements, and adjusting

and closing entries.
2A
Complete worksheet; prepare financial statements,

closing entries, and post-closing trial balance.
Moderate
5060
3A
Prepare financial statements, closing entries, and postclosing trial balance.
Moderate
4050
4A
Complete worksheet; prepare classified statement

of financial position, entries, and post-closing trial
balance.
Moderate
5060
5A
Complete all steps in accounting cycle.
Complex
7090
6A
Analyze errors and prepare correcting entries and trial

balance.
Moderate
4050
1B
Prepare worksheet, financial statements, and adjusting

and closing entries.
Simple
4050
2B
Complete worksheet; prepare financial statements,

closing entries, and post-closing trial balance.
Moderate
5060
3B
Prepare financial statements, closing entries, and postclosing trial balance.
Moderate
4050
4B
Complete worksheet; prepare classified statement

of financial position, entries, and post-closing trial
balance.
Moderate
5060
5B
Complete all steps in accounting cycle.
Complex
7090
Comprehensive Problem: Chapters 2 to 4
4-2
WEYGANDT IFRS 1E
CHAPTER 4
COMPLETING THE ACCOUNTING CYCLE
Number
SO
BT
Difficulty
Time (min.)
BE1
Simple
24
BE2
AN
Moderate
68
BE3
Simple
35
BE4
AP
Simple
35
BE5
AP
Simple
46
BE6
AP
Simple
68
BE7
Simple
24
BE8
Simple
35
BE9
AN
Moderate
46
BE10
AP
Simple
46
BE11
Simple
35
BE12
AN
Moderate
46
DI1
Simple
46
DI2
AP
Simple
24
DI3
AP
Simple
68
DI4
Simple
46
EX1
AP
Simple
1215
EX2
AP
Simple
1012
EX3
1, 6
AP
Simple
1215
EX4
2, 3
AP
Simple
1215
EX5
AN
Simple
1012
EX6
AN
Moderate
1215
EX7
2, 3
AP
Simple
810
EX8
2, 3
AP
Simple
1012
EX9
AP
Simple
1215
EX10
Simple
35
EX11
AP
Simple
68
EX12
AN
Moderate
810
EX13
AN
Moderate
46
EX14
AP
Moderate
1012
EX15
Simple
58
EX16
AP
Simple
810
4-3
COMPLETING THE ACCOUNTING CYCLE (Continued)

Number
SO
BT
Difficulty
Time (min.)
EX17
1, 6
AP
Simple
1215
EX18
AN
Moderate
57
EX19
2, 4, 7
AN
Moderate
1012
P1A
1-3, 6
AN
Simple
4050
P2A
1-3, 6
AP
Moderate
5060
P3A
1-3, 6
AP
Moderate
4050
P4A
1-3, 6
AN
Moderate
5060
P5A
1-4, 6
AN
Complex
7090
P6A
AN
Moderate
4050
P1B
1-3, 6
AN
Simple
4050
P2B
1-3, 6
AP
Moderate
5060
P3B
1-3, 6
AP
Moderate
4050
P4B
1-3, 6
AN
Moderate
5060
P5B
1-4, 6
AN
Complex
7090
BYP1
AN
Simple
1012
BYP2
AN
Simple
810
BYP3
Simple
1012
BYP4
AN
Moderate
1520
BYP5
Simple
1520
BYP6
Moderate
1015
4-4
State the required steps in

the accounting cycle.
Explain the approaches to

preparing correcting entries.
Identify the sections of

a classified statement of financial
position.
Prepare reversing entries.
*4.
*5.
*6.
*7.
Broadening Your Perspective
Describe the content and

purpose of a post-closing trial
balance.
Explain the process of closing

the books.
*2.
*3.
Prepare a worksheet.
*1.
Study Objective
Q4-14
Q4-15
Q4-16
Q4-11
Q4-12
BE4-8
Q4-6
Q4-11
Q4-12
BE4-1
Knowledge
Communication
Q4-10
Q4-20
Q4-17
Q4-18
BE4-11
DI4-4
E4-15
E4-16
E4-17
P4-2A
P4-3A
P4-2B
P4-3B
Financial Reporting
Comparative
Analysis
Decision Making
Across the
Organization
E4-18
E4-19
P4-4B
P4-5B
P4-5B
P4-5A
P4-1B
P4-4B
P4-5B
Analysis
Q4-21
BE4-12
P4-1A
P4-4A
P4-5A
P4-1B
P4-4B
P4-5B
BE4-9
E4-12
E4-13
P4-6A
Q4-19
BE4-10
DI4-3
E4-3
E4-9
E4-14
E4-19
P4-1A
P4-4A
P4-5A
P4-1B
P4-4B
P4-3A P4-1A
P4-2B P4-4A
P4-3B P4-5A
P4-1B
E4-8
E4-11
P4-2A
P4-3A
P4-2B
P4-3B
P4-3A BE4-2
P4-2B E4-5
P4-3B E4-6
P4-1A
P4-4A
Q4-13
E4-4
E4-7
E4-8
P4-2A
BE4-4
BE4-5
BE4-6
DI4-2
E4-4
E4-7
E4-1
E4-2
E4-3
E4-17
P4-2A
E4-19
P4-5A
P4-5B
BE4-3
DI4-1
Application
Q4-10
E4-10
Q4-8
Q4-9
BE4-7
Q4-7
Q4-1
Q4-2
Q4-3
Q4-4
Q4-5
Comprehension
Synthesis
Exploring the
Web
Ethics Case
Evaluation
Correlation Chart between Blooms Taxonomy, Study Objectives and End-of-Chapter Exercises and Problems
BLOOMS TAXONOMY TABLE
4-5
ANSWERS TO QUESTIONS
1.
No. A worksheet is not a permanent accounting record. The use of a worksheet is an optional
step in the accounting cycle.
2.
The worksheet is merely a device used to make it easier to prepare adjusting entries and the
financial statements.
3.
The amount shown in the adjusted trial balance column for an account equals the account
balance in the ledger after adjusting entries have been journalized and posted.
4.
The net income of $12,000 will appear in the income statement debit column and the statement
of financial position credit column. A net loss will appear in the income statement credit column
and the statement of financial position debit column.
5.
Formal financial statements are needed because the columnar data are not properly arranged
and classified for statement purposes. For example, the Dividends account is listed with assets.
6.
(1)
(2)
(3)
(4)
7.
Income Summary is a temporary account that is used in the closing process. The account is
debited for expenses and credited for revenues. The difference, either net income or loss, is then
closed to the Retained Earnings account.
8.
The post-closing trial balance contains only statement of financial position accounts. Its purpose
is to prove the equality of the permanent account balances that are carried forward into the next
accounting period.
9.
The accounts that will not appear in the post-closing trial balance are Depreciation Expense;
Dividends; and Service Revenue.
10.
A reversing entry is the exact opposite of an adjusting entry and is made at the beginning of the
new accounting period. Reversing entries are an optional step in the accounting cycle.
11.
The steps that involve journalizing are: (1) journalize the transactions, (2) journalize the adjusting
entries, and (3) journalize the closing entries.
12.
The three trial balances are the: (1) trial balance, (2) adjusted trial balance, and (3) post-closing
trial balance.
13.
Correcting entries differ from adjusting entries because they: (1) are not a required part of the
accounting cycle, (2) may be made at any time, and (3) may affect any combination of accounts.
4-6
(Dr) Individual revenue accounts and (Cr) Income Summary.

(Dr) Income Summary and (Cr) Individual expense accounts.
(Dr) Income Summary and (Cr) Retained Earnings.
(Dr) Retained Earnings and (Cr) Dividends.
Questions Chapter 4 (Continued)

*14. The standard classifications in a statement of financial position are:
Assets
Intangible Assets
Property, Plant, and Equipment
Long-term Investments
Current Assets
Equity and Liabilities

Equity
Non-current Liabilities
Current Liabilities
*
15. A companys operating cycle is the average time required to go from cash to cash in producing
revenues. The operating cycle of a company is the average time that it takes to purchase inventory,
sell it on account, and then collect cash from customers.
*16. Current assets are assets that a company expects to convert to cash or use up in one year. Some
companies use a period longer than one year to classify assets and liabilities as current because they
have an operating cycle longer than one year. Companies usually list current assets in the reverse
order in which they expect to convert them into cash.
*17. Long-term investments are generally investments in shares and bonds of other companies that
are normally held for many years. Property, plant, and equipment are assets with relatively long
useful lives that a company is currently using in operating the business.
*18. The two accounts and the purpose of each are: (1) Share capitalordinary is used to record
investments of assets in the business by the owners (shareholders). (2) Retained earnings is used
to record net income retained in the business.
*19.. Cadburys current liabilities at December 31, 2008 and December 31, 2007 were 3,388 million
and 4,614 million respectively. Cadburys current liabilities were higher than its current assets in
both years.
*20. After reversing entries have been made, the balances will be Interest Payable, zero balance;
Interest Expense, a credit balance.
*21. (a) Jan. 10
Salaries Expense ...................................................................................

Cash ...............................................................................................
8,000
8,000
Because of the January 1 reversing entry that credited Salaries Expense for $3,500, Salaries
Expense will have a debit balance of $4,500 which equals the expense for the current period.
(b)
Jan. 10
Salaries Payable.....................................................................................
Salaries Expense ...................................................................................
Cash ...............................................................................................
3,500
4,500
8,000
Note that Salaries Expense will again have a debit balance of $4,500.
4-7
SOLUTIONS TO BRIEF EXERCISES

BRIEF EXERCISE 4-1
The steps in using a worksheet are performed in the following sequence:
(1) prepare a trial balance on the worksheet, (2) enter adjustment data,
(3) enter adjusted balances, (4) extend adjusted balances to appropriate
statement columns and (5) total the statement columns, compute net
income (loss), and complete the worksheet. Filling in the blanks, the
answers are 1, 3, 4, 5, 2.
The solution to BRIEF EXERCISE 4-2 is on page 4-9.
BRIEF EXERCISE 4-3
Account
Accumulated Depreciation
Depreciation Expense
Share CapitalOrdinary
Dividends
Service Revenue
Supplies
Accounts Payable
Income Statement
Dr.
Cr.
Statement of
Financial Position
Dr.
Cr.
X
X
X
X
X
X
X
BRIEF EXERCISE 4-4

Dec. 31
31
31
31
4-8
Service Revenue ......................................................

Income Summary ............................................
50,000
Income Summary .....................................................

Salaries Expense.............................................
Supplies Expense ...........................................
31,000
Income Summary .....................................................

Retained Earnings ..........................................
19,000
Retained Earnings ...................................................

Dividends...........................................................
2,000
50,000
27,000
4,000
19,000
2,000
Prepaid Insurance
Service Revenue
Salaries Expense
Accounts Receivable
Salaries Payable
Insurance Expense
Account Titles
25,000
3,000
58,000
Trial Balance
Dr.
Cr.
(a) 1,200
(c)
800
(b) 1,100
(c)
800
(a) 1,200
(b) 1,100
Adjustments
Dr.
Cr.
LEY COMPANY
Worksheet
1,200
25,800
1,100
1,800
800
59,100
Adjusted
Trial Balance
Dr.
Cr.
1,200
25,800
59,100
Income
Statement
Dr.
Cr.
1,100
1,800
800
Statement of
Financial
Position
Dr.
Cr.
BRIEF EXERCISE 4-2
4-9
BRIEF EXERCISE 4-5

Salaries Expense
Bal. 27,000 (2) 27,000
Income Summary
(2) 31,000 (1) 50,000
(3) 19,000
50,000
50,000
Service Revenue
(1) 50,000 Bal. 50,000
Supplies Expense
Bal. 4,000 (2) 4,000
Retained Earnings
(4)
2,000 Bal. 30,000
(3) 19,000
Bal. 47,000
Dividends
Bal. 2,000 (4) 2,000
BRIEF EXERCISE 4-6

July 31
31
Date
7/31
7/31
Green Fee Revenue..................................................

Income Summary.............................................
13,600
Income Summary......................................................
Salaries Expense .............................................
Maintenance Expense ....................................
10,700
Explanation
Balance
Closing entry
Green Fee Revenue

Ref.
Debit
13,600
8,200
2,500
Credit
13,600
Balance
13,600
0
Credit
Balance
8,200
0
13,600
Salaries Expense
Ref.
Debit
8,200
Date
7/31
7/31
Explanation
Balance
Closing entry
4-10
8,200
BRIEF EXERCISE 4-6 (Continued)
Date
Explanation
7/31
7/31
Balance
Closing entry
Maintenance Expense
Ref.
Debit
Credit
Balance
2,500
2,500
0
2,500
BRIEF EXERCISE 4-7

The accounts that will appear in the post-closing trial balance are:
Supplies
Accounts Payable
BRIEF EXERCISE 4-8

The proper sequencing of the required steps in the accounting cycle is as
follows:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Analyze business transactions.

Journalize the transactions.
Post to ledger accounts.
Prepare a trial balance.
Journalize and post adjusting entries.
Prepare an adjusted trial balance.
Prepare financial statements.
Journalize and post closing entries.
Prepare a post-closing trial balance.
Filling in the blanks, the answers are 4, 2, 8, 7, 5, 3, 9, 6, 1.
4-11
BRIEF EXERCISE 4-9

1.
2.
Service Revenue .............................................................................

Accounts Receivable............................................................
780
Accounts Payable (1,750 1,570) .........................................

Store Supplies ........................................................................
180
780
180
BRIEF EXERCISE 4-10

DIAZ COMPANY
Partial Statement of Financial Position
Current assets
Prepaid insurance ...............................................................................
Supplies ..................................................................................................
Accounts receivable ...........................................................................
Short-term investments.....................................................................
Cash .........................................................................................................
Total ................................................................................................
3,600
5,200
12,500
6,700
15,400
43,400
BRIEF EXERCISE 4-11

CL
CA
PPE
PPE
CA
IA
Accounts payable
Accounts receivable
Accumulated depreciation
Building
Cash
Copyrights
CL
LTI
PPE
CA
IA
CA
Income tax payable

Investment in long-term bonds
Land
Merchandise inventory
Patent
Supplies
*BRIEF EXERCISE 4-12

Nov. 1
Salaries Payable.................................................................... 1,400

Salaries Expense .........................................................
1,400
The balances after posting the reversing entry are Salaries Expense (Cr.)
$1,400 and Salaries Payable $0.
4-12
SOLUTIONS FOR DO IT! REVIEW EXERCISES

DO IT! 4-1
Income statement debit columnUtilities Expense
Income statement credit columnService Revenue
Statement of financial position debit columnAccounts Receivable
Statement of financial position credit columnNotes Payable; Accumulated
Depreciation; Share Capital
DO IT! 4-2
Dec. 31
Dec. 31
Income Summary ................................................

Retained Earnings .......................................
29,000
Retained Earnings ..............................................

Dividends........................................................
22,000
29,000
22,000
DO IT! 4-3
ZURICH COMPANY
Partial Statement of Financial Position
December 31, 2011
Property, plant and equipment
Equipment............................................................
Less: Accumulated depreciation......
Long-term investments
Investments in ordinary shares .........
Current assets
Inventories ...........................................................
Accounts receivable .........................................
Short-term investments...................................
Cash .......................................................................
Total assets ..................................................................
CHF21,700
5,700
CHF16,000
6,500
2,900
4,300
120
13,400
20,720
CHF43,220
4-13
DO IT! 4-4
NA
CL
CL
CA
NCL
IA
4-14
Interest revenue
Utilities payable
Accounts payable
Supplies
Bonds payable
Trademarks
E
PPE
PPE
NA
LTI
CL
Machinery
Salaries expense
Investment in real estate
Unearned rent
SOLUTIONS TO EXERCISES
EXERCISE 4-1
LIN COMPANY
Worksheet
For the Month Ended June 30, 2011
Statement of
Account Titles
Trial Balance
Adjustments
Dr.
Dr.
Cr.
Cr.
Adj. Trial Balance

Dr.
Cr.
Income Statement
Dr.
Cr.
Financial Position
Dr.
Cash
2,320
2,320
2,320
Accounts Receivable
2,440
2,440
2,440
Supplies
1,880
Accounts Payable
Unearned Revenue
Totals
140
3,600
Service Revenue
Miscellaneous Expense
300
2,400
560
(b)
(c)
140
280
160
7,360
300
1,120
240 (b)
Salaries Expense
(a) 1,580
1,120
Cr.
1,120
100
100
3,600
3,600
2,540
2,540
840
840
160
160
7,360
Supplies Expense
(a) 1,580
Salaries Payable
Totals
1,580
(c)
2,000
280
2,000
1,580
280
7,640
7,640
280
2,580
Net Loss
Totals
2,580
2,540
5,060
40
40
2,580
5,100
5,100
5,100
4-15
EXERCISE 4-2
GOODE COMPANY
Worksheet (partial)
For the Month Ended April 30, 2011
Adjusted
Trial Balance
Account Titles
Cash
Accounts Receivable
Prepaid Rent
Equipment
Accum. Depreciation
Notes Payable
Accounts Payable
Retained Earnings
Dividends
Service Revenue
Salaries Expense
Rent Expense
Interest Expense
Interest Payable
Totals
Net Income
Totals
4-16
Dr.
13,752
7,840
2,280
23,050
Cr.
Income
Statement
Dr.
Cr.
Statement of
Financial Position
Dr.
13,752
7,840
2,280
23,050
4,921
5,700
5,672
25,000
5,960
4,921
5,700
5,672
25,000
5,960
3,650
3,650
15,590
10,840
760
671
57
62,900
Cr.
15,590
10,840
760
671
57
57
62,900
12,328
3,262
15,590
15,590
50,572
15,590
50,572
57
47,310
3,262
50,572
EXERCISE 4-3
GOODE COMPANY
Income Statement
Revenues
Service revenue..................................................................
Expenses
Salaries expense................................................................
Rent expense ......................................................................
Depreciation expense.......................................................
Interest expense.................................................................
Total expenses...........................................................
Net income ....................................................................................
15,590
10,840
760
671
57
12,328
3,262
GOODE COMPANY
Retained Earnings Statement
Retained earnings, April 1 ..................................................................
Add: Net income ..................................................................................
5,960
3,262
9,222
3,650
5,572
Less: Dividends ....................................................................................

Retained earnings, April 30................................................................
GOODE COMPANY
Statement of Financial Position
April 30, 2011
Assets
Property, plant, and equipment
Equipment ............................................................................
Less: Accumulated depreciation.................................
Current assets
Prepaid rent .........................................................................
Accounts receivable .........................................................
Cash .......................................................................................
Total assets ..................................................................................
23,050
4,921
2,280
7,840
13,752
18,129
23,872
42,001
4-17
EXERCISE 4-3 (Continued)

GOODE COMPANY
Statement of Financial Position (Continued)
April 30, 2011
Equity
Share capitalordinary...................................................
Retained earnings .............................................................
Current liabilities
Notes payable .....................................................................
Accounts payable..............................................................
Interest payable..................................................................
Total equity and liabilities ......................................................
25,000
5,572
5,700
5,672
57
30,572
11,429
42,001
EXERCISE 4-4
(a) Apr. 30
30
30
30
Service Revenue..............................................
Income Summary....................................
15,590
Income Summary.............................................
Salaries Expense ....................................
Rent Expense...........................................
Depreciation Expense...........................
Interest Expense .....................................
12,328
Income Summary.............................................
Retained Earnings..................................
3,262
Retained Earnings...........................................
Dividends ..................................................
3,650
15,590
10,840
760
671
57
3,262
3,650
(b)
(2)
(3)
4-18
Income Summary
12,328 (1)
15,590
3,262
15,590
15,590
(4)
Retained Earnings
3,650 Bal.
(3)
Bal.
5,960
3,262
5,572

(c)
GOODE COMPANY
Post-Closing Trial Balance
April 30, 2011
Cash ................................................................................
Accounts Receivable.................................................
Prepaid Rent.................................................................
Equipment .....................................................................
Accumulated Depreciation ......................................
Notes Payable ..............................................................
Accounts Payable.......................................................
Interest Payable...........................................................
Share CapitalOrdinary...........................................
Retained Earnings ......................................................
Debit
13,752
7,840
2,280
23,050
46,922
Credit
4,921
5,700
5,672
57
25,000
5,572
46,922
EXERCISE 4-5
(a) Accounts Receivable.................................................
Service Revenue .................................................
600
Insurance Expense.....................................................
Prepaid Insurance..............................................
400
Depreciation Expense ................................................

Accumulated Depreciation .............................
900
Salaries Expense .........................................................

Salaries Payable..................................................
500
600
400
900
500
4-19

(b)
Income Statement
Dr.
Accounts Receivable
Prepaid Insurance
Accum. Depreciation
Salaries Payable
Service Revenue
Salaries Expense
Insurance Expense
Cr.
Statement of
Financial Position
Dr.
Cr.
X
X
X
X
X
X
X
X
EXERCISE 4-6
(a) Accounts Receivable$25,000 ($34,000 $9,000).
Supplies$2,000 ($7,000 $5,000).
Accumulated Depreciation$22,000 ($12,000 + $10,000).
Salaries Payable$0 No liability recorded until adjustments are made.
Insurance Expense$6,000 ($26,000 $20,000).
Salaries Expense$44,000 ($49,000 $5,000).
(b) Accounts Receivable..........................................................
Service Revenue .........................................................
9,000
Insurance Expense..............................................................
Prepaid Insurance ......................................................
6,000
Supplies Expense................................................................
Supplies .........................................................................
5,000
Depreciation Expense ........................................................

10,000
Salaries Expense .................................................................

Salaries Payable..........................................................
5,000
4-20
9,000
6,000
5,000
10,000
5,000
EXERCISE 4-7
(a) Service Revenue .............................................................
Income Summary.....................................................
4,064
Income Summary............................................................
Salaries Expense .....................................................
Miscellaneous Expense.........................................
Supplies Expense....................................................
3,828
Income Summary............................................................
Retained Earnings...................................................
236
Retained Earnings ..........................................................

Dividends ...................................................................
300
(b)
4,064
1,344
256
2,228
236
300
RIO DE JANEIRO COMPANY

June 30, 2011
Account Titles
Cash ....................................................................................
Accounts Receivable.....................................................
Supplies .............................................................................
Accounts Payable...........................................................
Salaries Payable..............................................................
Unearned Revenue.........................................................
Share CapitalOrdinary...............................................
Retained Earnings (R$760 + R$236 R$300) ........
Debit
R$3,712
3,904
480
Credit
R$1,792
448
160
5,000
696
R$8,096 R$8,096
4-21
EXERCISE 4-8
(a)
General Journal
Date
Account Titles
July 31 Commission Revenue..............................
Rent Revenue .............................................
Income Summary............................
Ref.
404
429
350
Debit
65,000
6,500
31 Income Summary.......................................
Salaries Expense ............................
Utilities Expense .............................
Depreciation Expense ...................
350
720
732
711
74,600
31 Retained Earnings.....................................
Income Summary............................
320
350
3,100
Dividends...........................................
320
332
16,000
J15
Credit
71,500
55,700
14,900
4,000
3,100
16,000
(b)
Retained Earnings
Date
Explanation
Ref.
Debit
July 31 Balance
31 Close net loss
J15
3,100
31 Close dividends
J15
16,000
Income Summary
Date
Explanation
Ref.
Debit
July 31 Close revenue
J15
31 Close expenses
J15
74,600
31 Close net loss
J15
4-22
No. 320
Balance
25,200
22,100
6,100
Credit
Credit
71,500
3,100
No. 350
Balance
71,500
(3,100)
0

(c)
APACHI COMPANY
July 31, 2011
Cash ................................................................................
Equipment .....................................................................
Unearned Rent Revenue...........................................
Debit
$14,840
8,780
15,900
$39,520
Credit
$ 7,400
4,220
1,800
20,000
6,100
$39,520
EXERCISE 4-9
(a)
APACHI COMPANY
Income Statement
For the Year Ended July 31, 2011
Revenues
Commission revenue........................................
Rent revenue .......................................................
Total revenues ...........................................
Expenses
Salaries expense................................................
Utilities expense.................................................
Depreciation expense.......................................
Total expenses...........................................
Net loss ..........................................................................
$65,000
6,500
$71,500
55,700
14,900
4,000
74,600
($ 3,100)
4-23

APACHI COMPANY
Retained earnings, August 1, 2010.......................
Less: Net loss .............................................................
Dividends .........................................................
Retained earnings, July 31, 2011 ..........................
(b)
$25,200
$ 3,100
16,000
19,100
$ 6,100
APACHI COMPANY
July 31, 2011
Assets
Equipment...............................................................
Less: Accumulated depreciation ...................
Current assets
Accounts receivable ............................................
Cash ..........................................................................
Total assets .....................................................................
$15,900
7,400
8,780
14,840
$ 8,500
23,620
$32,120

Equity
Share capitalordinary......................................
Retained earnings ................................................
Current liabilities
Accounts payable.................................................
Unearned rent revenue .......................................
Total equity and liabilities...........................................
4-24
$20,000
6,100
4,220
1,800
$26,100
6,020
$32,120
EXERCISE 4-10
1.
False Analyze business transactions is the first step in the accounting

cycle.
2.
False. Reversing entries are an optional step in the accounting cycle.
3.
True.
4.
True.
5.
True.
6.
False. Steps 13 may occur daily in the accounting cycle. Steps 47 are
performed on a periodic basis. Steps 8 and 9 are usually prepared only
at the end of a companys annual accounting period.
7.
False. The step of journalize the transactions occurs before the step
of post to the ledger accounts.
8.
False. Closing entries are prepared after financial statements are prepared.
EXERCISE 4-11
(a) June 30
30
30
30
Service Revenue...........................................
Income Summary ................................
15,100
Income Summary .........................................

Salaries Expense.................................
Supplies Expense ...............................
Rent Expense .......................................
13,100
Income Summary .........................................

Retained Earnings ..............................
2,000
Retained Earnings .......................................

Dividends ...............................................
2,500
15,100
8,800
1,300
3,000
2,000
2,500
(b)
Income Summary
June 30 13,100 June 30
June 30
2,000
15,100
15,100
15,100
4-25
EXERCISE 4-12
(a) 1.
2.
3.
(b) 1.
2.
3.
4-26
Cash..............................................................................
Equipment.........................................................
600
Salaries Expense......................................................
Cash ....................................................................
600
Service Revenue.......................................................
Cash ....................................................................
100
Cash..............................................................................
Accounts Receivable.....................................
1,000
Accounts Payable ....................................................

Equipment.........................................................
890
Equipment ..................................................................
Accounts Payable...........................................
980
Salaries Expense......................................................
Equipment.........................................................
600
Service Revenue.......................................................
Cash..............................................................................
Accounts Receivable.....................................
100
900
Equipment ..................................................................
Accounts Payable...........................................
90
600
600
100
1,000
890
980
600
1,000
90
EXERCISE 4-13
1.
2.
3.
Accounts Payable (R$630 R$360).............................

Cash ..............................................................................
270
Supplies ................................................................................
Equipment ...................................................................
Accounts Payable.....................................................
560
Dividends..............................................................................
Salaries Expense ......................................................
400
270
56
504
400
EXERCISE 4-14
(a)
KARR BOWLING ALLEY

December 31, 2011
Assets
Land......................................................
Building...............................................
Less: Acc. depr.building ..........
Equipment ..........................................
Less: Acc. depr.equipment .....
Current assets
Prepaid insurance............................
Accounts receivable .......................
Cash .....................................................
Total assets ................................................
$64,000
$128,800
42,600
62,400
18,720
86,200
43,680
4,680
14,520
18,040
$193,880
37,240
$231,120
4-27

KARR BOWLING ALLEY
December 31, 2011
Equity
Share capitalordinary.....................................
Retained earnings ($15,000 + $3,440*)..........
Non-current liabilities
Note payable..........................................................
Current liabilities
Current portion of note payable .....................
Accounts payable................................................
Interest payable....................................................
Total equity and liabilities ...........................................
$100,000
18,440
$118,440
83,880
13,900
12,300
2,600
28,800
$231,120
*Net income = $14,180 $780 $7,360 $2,600 = $3,440

(b) Current assets exceed current liabilities by $8,440 ($37,240 $28,800).
In addition, approximately 50% of current assets are in the form of cash.
In sum, the companys liquidity appears to be reasonably good.
EXERCISE 4-15
CL
CA
PPE
PPE
CA
E
IA
CL
4-28
Accounts payable
Accounts receivable
Buildings
Cash
Share capitalordinary
Patents
Salaries payable
CA
LTI
PPE
NCL
CA
PPE
CA
Inventories
Investments
Land
Long-term debt
Supplies
Office equipment
Prepaid expenses
EXERCISE 4-16
R. STEVENS COMPANY
December 31, 2011
(in thousands)
Assets
Equipment ............................................................
Less: Accumulated depreciation.................
Long-term investments.............................................
Current assets
Prepaid expenses ..............................................
Inventories ...........................................................
Accounts receivable .........................................
Short-term investments ...................................
Cash .......................................................................
Total assets ..................................................................
11,500
(5,655)
880
1,256
1,696
3,690
2,668
5,845
264
10,190
16,299

Equity
Share capitalordinary ...................................
Retained earnings..............................................
Long-term debt ...................................................
Notes payable (after 2012) ..............................
Current liabilities
Notes payable in 2012 ......................................
Accounts payable ..............................................
Total equity and liabilities........................................
10,000
3,063
13,063
943
368
1,311
481
1,444
1,925
16,299
4-29
EXERCISE 4-17
(a)
B. SNYDER COMPANY, INC.
Income Statement
Revenues
Commission revenue ...................................
Rent revenue ...................................................
Total revenues .......................................
Expenses
Salaries expense............................................
Utilities expense.............................................
Depreciation expense...................................
Total expense.........................................
Net loss ......................................................................
$61,100
8,500
$69,600
51,700
22,600
4,000
78,300
$ (8,700)

Retained earnings, August 1, 2010...................
Less: Net loss .........................................................
Dividends .....................................................
Retained earnings, July 31, 2011.......................
4-30
$21,200
$8,700
4,000
12,700
$ 8,500

(b)
July 31, 2011
Assets
Equipment ................................................................
Less: Accumulated depreciation.....................
Current assets
Accounts receivable .............................................
Cash ...........................................................................
Total assets ......................................................................
$18,500
6,000
9,780
24,200
$12,500
33,980
$46,480

Equity
Share capitalordinary .......................................
Retained earnings..................................................
Note payable............................................................
Current liabilities
Accounts payable ..................................................
Salaries payable .....................................................
Total equity and liabilities............................................
$30,000
8,500
$38,500
1,800
4,100
2,080
6,180
$46,480
4-31
*EXERCISE 4-18
(a) Dec. 31
Jan. 6
(b) Dec. 31
Jan. 1
Jan. 6
Salaries Expense (R$10,000 X 2/5)..........

Salaries Payable ...................................
4,000
Salaries Payable ............................................

Salaries Expense (R$10,000 X 3/5)..........
Cash..........................................................
4,000
6,000
Salaries Expense...........................................
Salaries Payable ...................................
4,000
Salaries Payable ............................................

Salaries Expense..................................
4,000
Salaries Expense...........................................
Cash..........................................................
10,000
4,000
10,000
4,000
4,000
10,000
*EXERCISE 4-19
(a) Dec. 31
31
(b) Jan. 1
4-32
Commission Revenue .................................

Income Summary .................................
92,000
Income Summary ..........................................

Interest Expense...................................
7,800
Commission Revenue .................................

Accounts Receivable ..........................
4,500
Interest Payable.............................................
Interest Expense...................................
1,500
92,000
7,800
4,500
1,500
*EXERCISE 4-19 (Continued)

(c) & (e)
Accounts Receivable
Dec. 31 Balance
*19,500
31 Adjusting
4,500
24,000
Jan. 1 Reversing
4,500
*($24,000 $4,500)
Commission Revenue
Dec. 31 Closing
92,000 Dec. 31 Balance
31 Adjusting
92,000
Jan. 1 Reversing
4,500 Jan. 10
87,500*
4,500
92,000
4,500
*($92,000 $4,500)
Jan. 1
Reversing
Dec. 31 Balance
31 Adjusting
Jan. 15
Interest Payable
Dec. 31 Adjusting
1,500
Interest Expense
*6,300 Dec. 31 Closing
1,500
7,800
2,500 Jan. 1 Reversing
1,500
7,800
7,800
1,500
*($7,800 $1,500)
(d)
Jan. 10
15
(1)
Cash..........................................................................
Commission Revenue................................
4,500
(2)
Interest Expense...................................................
Cash.................................................................
2,500
4,500
2,500
4-33
4-34
Account Titles
2,200
1,300
1,200
200
55,970
600
11,400
5,620
1,050
2,400
30,000
55,970
13,620
10,000
12,350
20,000
530
300
600
3,100
(c)
(d)
(a)
670
(b) 1,000
(e)
530
670
600
(c)
3,100
300
(b) 1,000
(e)
(a)
(d)
Cr.
Dr.
Dr.
Cr.
Adjustments
Trial Balance
600
57,800
300
670
1,000
2,200
1,300
1,200
200
600
11,400
6,150
380
1,800
30,000
Dr.
57,800
300
1,000
14,150
10,000
12,350
20,000
Cr.
Adjusted
Trial Balance
THOMAS MAGNUM, P.I., INC.

Worksheet
For the Quarter Ended March 31, 2011
600
7,470
6,680
14,150
300
670
1,000
2,200
1,300
1,200
200
Dr.
50,330
50,330
14,150
600
11,400
6,150
380
1,800
30,000
Dr.
43,650
6,680
50,330
300
1,000
10,000
12,350
20,000
Cr.
Statement of
Financial Position
14,150
14,150
Cr.
Income
Statement
Key: (a) Supplies Used; (b) Depreciation Expensed; (c) Accrued Interest on note; (d) Insurance Expired; (e) Service Revenue
Earned but unbilled.
Cash
Accounts Receivable
Supplies
Prepaid Insurance
Equipment
Notes Payable
Accounts Payable
Dividends
Service Revenue
Salaries Expense
Travel Expense
Rent Expense
Totals
Supplies Expense
Interest Expense
Interest Payable
Insurance Expense
Totals
Net Income
Totals
(a)
SOLUTIONS TO PROBLEMS
PROBLEM 4-1A
PROBLEM 4-1A (Continued)

(b)

Income Statement
Revenues
Service revenue.......................................................
Expenses
Salaries expense.....................................................
Travel expense.........................................................
Rent expense............................................................
Depreciation expense............................................
Supplies expense ...................................................
Insurance expense .................................................
Interest expense......................................................
Miscellaneous expense ........................................
Total expenses................................................
Net income .........................................................................
14,150
2,200
1,300
1,200
1,000
670
600
300
200
7,470
6,680

Retained earnings, January 1...................................................
Add: Net income ........................................................................
Less: Dividends ...........................................................................
Retained earnings, March 31 ....................................................
0
6,680
6,680
600
6,080
4-35

March 31, 2011
Assets
Equipment ...............................................................
Less: Accumulated depreciation ....................
Current assets
Prepaid insurance .................................................
Supplies....................................................................
Accounts receivable.............................................
Cash...........................................................................
Total assets......................................................................
30,000
1,000
1,800
380
6,150
11,400
29,000
19,730
48,730

Equity
Share capitalordinary ......................................
Retained earnings .................................................
Current liabilities
Notes payable.........................................................
Accounts payable .................................................
Interest payable .....................................................
(c) Mar. 31
31
31
31
4-36
20,000
6,080
10,000
12,350
300
Supplies Expense .......................................

Supplies ................................................
670
Depreciation Expense ...............................

Accumulated Depreciation ............
1,000
Interest Expense .........................................

Interest Payable..................................
300
Insurance Expense.....................................
Prepaid Insurance..............................
600
26,080
22,650
48,730
670
1,000
300
600

Mar. 31
(d) Mar. 31
31
31
31
Accounts Receivable......................................
Service Revenue .....................................
530
Service Revenue ..............................................

Income Summary....................................
14,150
Income Summary.............................................
Travel Expense........................................
Rent Expense...........................................
Insurance Expense.................................
Depreciation Expense ...........................
Supplies Expense...................................
Interest Expense .....................................
Miscellaneous Expense........................
7,470
Income Summary.............................................
6,680
Dividends ..................................................
600
530
14,150
1,300
2,200
1,200
600
1,000
670
300
200
6,680
600
4-37
PROBLEM 4-2A
(a)
PORTER COMPANY
Partial Worksheet
For the Year Ended December 31, 2011
Account
No. Titles
101
112
126
130
151
152
200
201
212
230
311
320
332
400
610
631
711
722
726
905
4-38
Cash
Accounts Receivable
Supplies
Prepaid Insurance
Office Equipment
Acc. Depr.Off. Equip.
Notes Payable
Accounts Payable
Salaries Payable
Interest Payable
Retained Earnings
Dividends
Service Revenue
Advertising Expense
Supplies Expense
Insurance Expense
Salaries Expense
Interest Expense
Totals
Net Income
Totals
Adjusted
Trial Balance
Dr.
Cr.
Income
Statement
Dr.
Cr.
18,800
16,200
2,300
4,400
44,000
Statement of
Financial Position
Dr.
Cr.
18,800
16,200
2,300
4,400
44,000
20,000
20,000
8,000
2,600
1,000
30,000
6,000
20,000
20,000
8,000
2,600
1,000
30,000
6,000
12,000
12,000
77,800
12,000
3,700
8,000
4,000
39,000
1,000
165,400 165,400
77,800
12,000
3,700
8,000
4,000
39,000
1,000
67,700
10,100
77,800
77,800
97,700
77,800
97,700
87,600
10,100
97,700

(b)
PORTER COMPANY
Income Statement
Revenues
Service revenue.....................................................
Expenses
Salaries expense...................................................
Advertising expense ............................................
Depreciation expense..........................................
Insurance expense ...............................................
Supplies expense .................................................
Interest expense....................................................
Total expenses..............................................
Net income .......................................................................
$77,800
$39,000
12,000
8,000
4,000
3,700
1,000
67,700
$10,100
PORTER COMPANY
Retained earnings, January 1..........................................................
Add: Net income................................................................................
Less: Dividends ..................................................................................
Retained earnings, December 31 ...................................................
$ 6,000
10,100
16,100
12,000
$ 4,100
4-39

PORTER COMPANY
December 31, 2011
Assets
Office equipment ...................................................
Current assets
Supplies....................................................................
Cash...........................................................................
Total assets......................................................................
$44,000
20,000
4,400
2,300
16,200
18,800
$24,000
41,700
$65,700

Equity
Notes payable.........................................................
Current liabilities
Notes payable.........................................................
Salaries payable ....................................................
4-40
$30,000
4,100
$34,100
10,000
10,000
8,000
2,600
1,000
21,600
$65,700

(c)
General Journal
Date
Account Titles and Explanation
Dec. 31 Service Revenue ........................................
Income Summary ............................
Ref.
400
350
Debit
77,800
31 Income Summary.......................................
Advertising Expense......................
Supplies Expense ...........................
Insurance Expense.........................
Interest Expense .............................
350
610
631
711
722
726
905
67,700
31 Income Summary.......................................
Retained Earnings ..........................
350
320
10,100
Dividends...........................................
320
332
12,000
J14
Credit
77,800
12,000
3,700
8,000
4,000
39,000
1,000
10,100
12,000
(d)
Date
Explanation
Jan. 31 Balance
Dec. 31 Closing entry
31 Closing entry
Date
Explanation
Dec. 31 Balance
31 Closing entry
Retained Earnings
Ref.
Debit

J14
J14
12,000
Dividends
Ref.

J14
Debit
12,000
Credit
6,000
10,100
Credit
12,000
No. 320
Balance
6,000
16,100
4,100
No. 332
Balance
12,000
0
4-41
Explanation
Closing entry
Closing entry
Closing entry
Income Summary
Ref.
Debit
J14
J14
67,700
J14
10,100
Date
Explanation
Dec. 31 Balance
31 Closing entry
Service Revenue
Ref.
Debit

J14
77,800
Date
Explanation
Dec. 31 Balance
31 Closing entry
Advertising Expense
Ref.
Debit

12,000
J14
Date
Explanation
Dec. 31 Balance
31 Closing entry
Supplies Expense
Ref.
Debit

3,700
J14
Date
Explanation
Dec. 31 Balance
31 Closing entry
Ref.
Debit

8,000
J14
Date
Dec. 31
31
31
Date
Dec. 31
31
4-42
Explanation
Balance
Closing entry
Insurance Expense
Ref.
Debit

4,000
J14
Credit
77,800
No. 350
Balance
77,800
10,100
0
Credit
77,800
No. 400
Balance
77,800
0
Credit
No. 610
Balance
12,000
0
12,000
Credit
3,700
Credit
8,000
Credit
4,000
No. 631
Balance
3,700
0
No. 711
Balance
8,000
0
No. 722
Balance
4,000
0
Date
Explanation
Dec. 31 Balance
31 Closing entry
Salaries Expense
Ref.
Debit

39,000
J14
Date
Explanation
Dec. 31 Balance
31 Closing entry
Interest Expense
Ref.
Debit

1,000
J14
(e)
Credit
39,000
Credit
1,000
No. 726
Balance
39,000
0
No. 905
Balance
1,000
0
PORTER COMPANY
December 31, 2011
Cash ................................................................................
Supplies .........................................................................
Office Equipment ........................................................
Accumulated DepreciationOffice
Equipment ................................................................
Notes Payable ..............................................................
Debit
$18,800
16,200
2,300
4,400
44,000
$85,700
Credit
$20,000
20,000
8,000
2,600
1,000
30,000
4,100
$85,700
4-43
PROBLEM 4-3A
(a)
WOODS COMPANY, INC.

Income Statement
Revenues
Service revenue ..................................................
Expenses
Salaries expense ................................................
Repair expense ...................................................
Utilities expense .................................................
Depreciation expense .......................................
Insurance expense.............................................
Total expenses ...........................................
Net loss...........................................................................
$44,000
$35,200
5,400
4,000
2,800
1,200
48,600
$ (4,600)
WOODS COMPANY
Retained earnings, January 1 .................................
Less: Net loss..............................................................
Dividends..........................................................
Retained earnings, December 31...........................
$14,000
$4,600
7,200
11,800
$ 2,200
WOODS COMPANY, INC.

December 31, 2011
Assets
Equipment ............................................................
Less: Accumulated depreciation .................
Current assets
Prepaid insurance ..............................................
Accounts receivable..........................................
Cash........................................................................
Total assets...................................................................
4-44
$28,000
8,600
1,800
7,500
8,200
$19,400
17,500
$36,900

WOODS COMPANY, INC.
December 31, 2011
Equity
Share capitalordinary ...................................
Retained earnings..............................................
Current liabilities
Accounts payable ..............................................
Salaries payable .................................................
Total equity and liabilities........................................
$20,000
2,200
11,700
3,000
$22,200
14,700
$36,900
(b)
General Journal
Date
Account Titles
Income Summary ............................
Ref.
400
350
Debit
44,000
Income Summary.......................................
Repair Expense................................
Salaries Expense.............................
Utilities Expense..............................
350
622
711
722
726
732
48,600
Retained Earnings.....................................
Income Summary ............................
320
350
4,600
Dividends...........................................
320
332
7,200
31
31
31
Credit
44,000
5,400
2,800
1,200
35,200
4,000
4,600
7,200
4-45

(c)
Retained Earnings No. 320
4,600 12/31 Bal. 14,000
7,200
12/31 Bal.
2,200
12/31
12/31
Repair Expense
5,400 12/31
12/31 Bal.
No. 622
5,400
Depreciation Expense No. 711

12/31 Bal.
2,800 12/31
2,800
12/31 Bal.
Dividends
7,200 12/31
No. 332
7,200
Insurance Expense
12/31 Bal.
1,200 12/31
12/31
12/31
(d)
Income Summary
48,600 12/31
12/31
48,600
No. 350
44,000
4,600
48,600
Service Revenue
No. 400
44,000 12/31 Bal. 44,000
Salaries Expense
35,200 12/31
No. 726
35,200
Utilities Expense
12/31 Bal.
4,000 12/31
No. 732
4,000
12/31 Bal.
WOODS COMPANY, INC.

December 31, 2011
Cash.................................................................................
Accounts Receivable .................................................
Prepaid Insurance.......................................................
Equipment .....................................................................
Accumulated Depreciation.......................................
Accounts Payable .......................................................
Salaries Payable ..........................................................
Share CapitalOrdinary ...........................................
Totals......................................................................
4-46
No. 722
1,200
Debit
$ 8,200
7,500
1,800
28,000
$45,500
Credit
$ 8,600
11,700
3,000
20,000
2,200
$45,500
Account Titles

277,500
36,200
14,600
3,700
50,000
100,000
9,700
Cr.
105,000
30,500
9,400
16,900
18,000
6,000
491,700 491,700
14,000
41,400
18,600
31,900
80,000
120,000
Dr.
Trial Balance
(c)
55,100
6,000
(e)
3,000
55,100
3,000
504,700 504,700
6,000
279,200
Cr.
239,200 279,200
40,000
279,200 279,200
6,000
23,000
17,400
4,000
279,200
23,000
17,400
14,000
Dr.
(b) 23,000
(a) 17,400
4,000
1,700
42,200
14,600
2,000
50,000
100,000
9,700
Cr.
3,000
4,000
(f)
(d)
6,000
41,400
1,200
8,900
80,000
120,000
Dr.
Income
Statement
105,000
30,500
9,400
16,900
21,000
10,000
1,700
(c)
(a) 17,400
(b) 23,000
Cr.
Adjusted
Trial Balance
105,000
30,500
9,400
16,900
21,000
10,000
(e)
(f)
(d)
Dr.
Adjustments
SALVADOR AMUSEMENT PARK, INC.

Worksheet
For the Year Ended September 30, 2011
265,500
265,500
14,000
41,400
1,200
8,900
80,000
120,000
Dr.
3,000
225,500
40,000
265,500
4,000
42,200
14,600
2,000
50,000
100,000
9,700
Cr.
Statement of
Financial Position
Key: (a) Supplies Used; (b) Expired Insurance; (c) Depreciation Expensed; (d) Admissions Revenue Earned; (e) Accrued Property Taxes;
(f) Accrued Interest Payable.
Cash
Supplies
Prepaid Insurance
Land
Equipment
Accounts Payable
Unearned Admissions Revenue
Mortgage Note Payable
Retained Earnings
Dividends
Admissions Revenue
Salaries Expense
Repair Expense
Advertising Expense
Utilities Expense
Property Taxes Expense
Interest Expense
Totals
Insurance Expense
Supplies Expense
Interest Payable
Property Taxes Payable
Totals
Net Income
Totals
(a)
PROBLEM 4-4A
4-47

(b)

September 30, 2011
Assets
Land......................................................
R$ 80,000
Equipment .......................................... R$120,000
Less: Accum. depreciation..........
42,200
77,800 R$157,800
Current assets
Prepaid insurance............................
8,900
Supplies ..............................................
1,200
Cash......................................................
41,400
51,500
Total assets.................................................
R$209,300
Equity
Share capitalordinary .................
Retained earnings............................
Mortgage note payable...................
Current liabilities
Current maturity of mortgage
note payable..................................
Accounts payable ............................
Interest payable ................................
Property taxes payable ..................
Unearned admissions
revenue ...........................................
Total equity and liabilities ......................
R$100,000
35,700* R$135,700
40,000
10,000
14,600
4,000
3,000
2,000
33,600
R$209,300
*R$9,700 + R$40,000 R$14,000
4-48

(c) Sept. 30
30
30
30
30
30
(d) Sept. 30
30
30
30
Supplies Expense......................................
Supplies ...............................................
17,400
Insurance Expense ...................................

Prepaid Insurance ............................
23,000
Depreciation Expense..............................
Accumulated Depreciation ............
6,000
Unearned Admissions Revenue ...........

Admissions Revenue ......................
1,700
Property Taxes Expense .........................

Property Taxes Payable..................
3,000
Interest Expense ........................................

Interest Payable ................................
4,000
Admissions Revenue ...............................

Income Summary..............................
279,200
Income Summary.......................................
Salaries Expense ..............................
Repair Expense .................................
Insurance Expense...........................
Property Taxes Expense ................
Supplies Expense.............................
Utilities Expense ...............................
Interest Expense ...............................
Advertising Expense .......................
Depreciation Expense .....................
239,200
Income Summary.......................................
Retained Earnings............................
40,000
Dividends ............................................
14,000
17,400
23,000
6,000
1,700
3,000
4,000
279,200
105,000
30,500
23,000
21,000
17,400
16,900
10,000
9,400
6,000
40,000
14,000
4-49

(e)

September 30, 2011
Cash ...........................................................................
Supplies ....................................................................
Prepaid Insurance..................................................
Land............................................................................
Equipment ................................................................
Accumulated Depreciation .................................
Accounts Payable..................................................
Interest Payable......................................................
Property Taxes Payable.......................................
Unearned Admissions Revenue .......................
Mortgage Note Payable........................................
Share CapitalOrdinary......................................
Retained Earnings .................................................
Debit
R$ 41,400
1,200
8,900
80,000
120,000
R$251,500
4-50
Credit
R$ 42,200
14,600
4,000
3,000
2,000
50,000
100,000
35,700
R$251,500
PROBLEM 4-5A
(a)
Date
Mar. 1
14
18
20
21
28
31
31
General Journal
Cash .............................................................
Share CapitalOrdinary.............
Ref.
101
311
Debit
10,000
Equipment..................................................
Cash ..................................................
Accounts Payable.........................
157
101
201
6,000
Cleaning Supplies ...................................

128
201
1,200
Prepaid Insurance ...................................

Cash ..................................................
130
101
1,200
Accounts Receivable .............................

Service Revenue ...........................
112
400
4,800
Accounts Payable ...................................

Cash ..................................................
201
101
2,000
Salaries Expense .....................................

Cash ..................................................
726
101
1,800
Cash .............................................................
Accounts Receivable...................
101
112
1,400

Service Revenue ...........................
112
400
2,500
Gas & Oil Expense ..................................

Cash ..................................................
633
101
200
Dividends ...................................................
Cash ..................................................
332
101
700
J1
Credit
10,000
3,000
3,000
1,200
1,200
4,800
2,000
1,800
1,400
2,500
200
700
4-51
4-52
Account Titles
200
1,800
19,500
700
2,500
5,900
1,200
1,200
6,000
Dr.
19,500
7,300
2,200
10,000
Cr.
Trial Balance
100
800
(c)
(d)
2,350
250
500
700
(b)
(e)
(a)
Dr.
(e)
(b)
(a)
(d)
(c)
250
700
800
100
500
2,350
Cr.
Adjustments
20,950
100
800
250
200
2,300
700
2,500
6,600
400
1,100
6,000
Dr.
500
20,950
250
8,000
2,200
10,000
Cr.
Adjusted
Trial Balance
EDDYS CARPET CLEANERS

Worksheet
For the Month Ended March 31, 2011
3,650
4,350
8,000
100
800
250
200
2,300
Dr.
17,300
17,300
8,000
700
2,500
6,600
400
1,100
6,000
Dr.
500
12,950
4,350
17,300
250
2,200
10,000
Cr.
Statement of
Financial Position
8,000
8,000
Cr.
Income
Statement
Key: (a) Service Revenue Earned; (b) Depreciation Expensed; (c) Insurance Expired; (d) Cleaning Supplies Used; (e) Unpaid Salaries.
Cash
Accounts Receivable
Cleaning Supplies
Prepaid Insurance
Equipment
Accounts Payable
Dividends
Service Revenue
Gas & Oil Expense
Salaries Expense
Totals
Accum. Depr.Equipment
Insurance Expense
Cleaning Supplies Expense
Salaries Payable
Totals
Net Income
Totals
(b)&(c)

(a), (e) & (f)
Date
Mar. 1
1
5
18
20
21
31
31
Date
Mar. 14
21
28
31
Date
Mar. 3
31
Date
Mar. 5
31
Date
Mar. 1
Explanation
Explanation
Adjusting
Explanation
Adjusting
Explanation
Adjusting
Explanation
Cash
Ref.
J1
J1
J1
J1
J1
J1
J1
J1
Debit
10,000
3,000
1,200
2,000
1,800
1,400
200
700
Accounts Receivable
Ref.
Debit
J1
4,800
J1
J1
2,500
J2
700
Cleaning Supplies
Ref.
Debit
J1
1,200
J2
Prepaid Insurance
Ref.
Debit
J1
1,200
J2
Equipment
Ref.
J1
Credit
Debit
6,000
Credit
1,400
Credit
800
Credit
100
Credit
No. 101
Balance
10,000
7,000
5,800
3,800
2,000
3,400
3,200
2,500
No. 112
Balance
4,800
3,400
5,900
6,600
No. 128
Balance
1,200
400
No. 130
Balance
1,200
1,100
No. 157
Balance
6,000
4-53
Date
Mar. 31
Date
Mar. 1
3
18
Date
Mar. 31
Date
Mar. 1
Date
Mar. 1
31
31
Date
Mar. 31
31
Date
Mar. 31
31
31
4-54
Accumulated DepreciationEquipment
Explanation
Ref.
Debit
Credit
Adjusting
J2
250
Explanation
Explanation
Adjusting
Explanation
Explanation
Accounts Payable
Ref.
Debit
J1
J1
J1
2,000
Salaries Payable
Ref.
Debit
J2
Ref.
Debit
J1
Retained Earnings
Ref.
Debit
Closing
Closing
Explanation
Closing
Explanation
Closing
Closing
Closing
J3
J3
Dividends
Ref.
J1
J3
Credit
500
Credit
10,000
No. 311
Balance
10,000
Credit
700
Debit
700
No. 201
Balance
3,000
4,200
2,200
No. 212
Balance
500
4,350
Income Summary
Ref.
Debit
J3
J3
3,650
J3
4,350
Credit
3,000
1,200
No. 158
Balance
250
Credit
700
Credit
8,000
No. 320
Balance
0
4,350
3,650
No. 332
Balance
700
0
No. 350
Balance
8,000
4,350
0
Date
Mar. 14
28
31
31
Date
Mar. 31
31
Explanation
Adjusting
Closing
Explanation
Closing
Service Revenue
Ref.
Debit
J1
J1
J2
J3
8,000
Gas & Oil Expense
Ref.
Debit
J1
200
J3
Date
Mar. 31
31

Explanation
Ref.
Debit
Adjusting
J2
800
Closing
J3
Date
Mar. 31
31
Explanation
Adjusting
Closing
Ref.
Debit
J2
250
J3
Explanation
Adjusting
Closing
Insurance Expense
Ref.
Debit
J2
100
J3
Date
Mar. 31
31
Date
Mar. 20
31
31
Explanation
Adjusting
Closing
Salaries Expense
Ref.
Debit
J1
1,800
J2
500
J3
Credit
4,800
2,500
700
No. 400
Balance
4,800
7,300
8,000
0
Credit
No. 633
Balance
200
0
200
Credit
800
Credit
250
Credit
100
Credit
2,300
No. 634
Balance
800
0
No. 711
Balance
250
0
No. 722
Balance
100
0
No. 726
Balance
1,800
2,300
0
4-55

(d)

Income Statement
Revenues
Service revenue.....................................................
Expenses
Salaries expense ...................................................
Cleaning supplies expense................................
Gas & oil expense .................................................
Total expenses..............................................
Net income .......................................................................
$8,000
$2,300
800
250
200
100
3,650
$4,350

Retained earnings, March 1........................................
Add: Net income ..........................................................
$
0
4,350
4,350
700
$3,650
Less: Dividends.............................................................
Retained earnings, March 31 .....................................

March 31, 2011
Assets
Equipment .................................................................
Less: Accumulated depreciation......................
4-56
$ 6,000
250
$ 5,750

March 31, 2011
Assets (Continued)
Current assets
Prepaid insurance ..................................................
Cleaning supplies...................................................
Accounts receivable ..............................................
Cash ............................................................................
Total assets .......................................................................
1,100
400
6,600
2,500
10,600
$16,350

Equity
Share capitalordinary........................................
Retained earnings ..................................................
Current liabilities
Accounts payable...................................................
Salaries payable......................................................
Total equity and liabilities.............................................
$10,000
3,650
2,200
500
$13,650
2,700
$16,350
(e)
Date
Mar. 31
31
31
31
31
General Journal
Accounts Receivable.............................
Service Revenue ...........................
Ref.
112
400
Debit
700

Equipment ..................................
711
250
Prepaid Insurance ........................
722
130
100
Cleaning Supplies Expense.................

Cleaning Supplies ........................
634
128
800
Salaries Expense.....................................
Salaries Payable ...........................
726
212
500
700
158
J2
Credit
250
100
800
500
4-57

(f)
General Journal
Service Revenue ......................................
Income Summary...........................
Ref.
400
350
Debit
8,000
31 Income Summary .....................................

Salaries Expense ...........................
Depreciation Expense ..................
Insurance Expense........................
Cleaning Supplies Expense .......
Gas & Oil Expense ........................
350
726
711
722
634
633
3,650
31 Income Summary .....................................

Retained Earnings.........................
350
320
4,350
31 Retained Earnings ...................................

Dividends .........................................
320
332
700
Date
Mar. 31
(g)
8,000
2,300
250
100
800
200
4,350
700

March 31, 2011
Cash ................................................................................
Cleaning Supplies.......................................................
Equipment .....................................................................
Accumulated DepreciationEquipment.............
000,000
4-58
J3
Credit
Debit
$ 2,500
6,600
400
1,100
6,000
Credit
$16,600
250
2,200
500
10,000
3,650
$16,600
Cash ...........................................
Accts. Receivable ..........
Misc. Expense........................
Cash.....................................
Salaries Expense..................
Cash.....................................
Supplies....................................
Accounts Payable..........
Equipment ...............................
Cash.....................................
2.
3.
4.
5.
(1) INCORRECT ENTRY
1.
(a)
59
290
1,900
65
960
59
290
1,900
65
960
Repair Expense .....................

Cash.....................................
Equipment ...............................
Accounts Payable..........
Salaries Expense..................
Salaries Payable ...................
Cash.....................................
Advertising Expense...........
Cash.....................................
Cash ...........................................
Accts. Receivable ..........
(2) CORRECT ENTRY
95
290
1,200
700
65
690
95
290
1,900
65
690
65
Repair Expense ......................

Cash......................................
Equipment..........................
95
Equipment ................................ 290

Supplies ..............................
Salaries Payable .................... 700

Salaries Expense ............
Advertising Expense............
Misc. Expense ..................
Accounts Receivable........... 270

Cash......................................
(3) CORRECTING ENTRY
36
59
290
700
65
270
PROBLEM 4-6A
4-59

(b)
CLARK CABLE, INC.

Trial Balance
April 30, 2011
Cash (4,100 270 36)....................................
Accounts Receivable (3,200 + 270) ...............
Supplies (800 290) ...........................................
Equipment (10,600 + 290 59)......................
Accumulated Depreciation ...................................
Accounts Payable....................................................
Salaries Payable (700 700) ............................
Unearned Revenue ..................................................
Share CapitalOrdinary........................................
Retained Earnings ...................................................
Service Revenue ......................................................
Salaries Expense (3,300 700) .......................
Advertising Expense (600 + 65)......................
Miscellaneous Expense (290 65) ................
Depreciation Expense ............................................
Repair Expense.........................................................
4-60
Debit
3,794
3,470
510
10,831
Credit
1,350
2,100
0
890
10,000
2,900
5,450
2,600
665
225
500
95
22,690
22,690
Account Titles
1,300
400
23,500
1,100
4,500
3,200
2,000
11,000
Dr.
23,500
6,300
1,250
2,500
550
12,900
Cr.
Trial Balance
600
380
2,580
(a) 1,350
(b)
250
(d)
(c)
Dr.
(d)
(c)
(b)
600
2,580
380
250
(a) 1,350
Cr.
Adjustments
24,350
1,350
250
1,900
400
1,100
4,500
3,200
650
11,000
Dr.
600
24,350
6,680
1,500
2,500
170
12,900
Cr.
Adjusted
Trial Balance
SASSE ROOFING, INC.

Worksheet
3,900
2,780
6,680
1,350
250
1,900
400
Dr.
20,450
20,450
6,680
1,100
4,500
3,200
650
11,000
Dr.
600
17,670
2,780
20,450
1,500
2,500
170
12,900
Cr.
Statement of
Financial Position
6,680
6,680
Cr.
Income
Statement
Key: (a) Supplies Used; (b) Depreciation Expensed; (c) Service Revenue Earned; (d) Salaries Accrued.
Cash
Accounts Receivable
Roofing Supplies
Equipment
Accounts Payable
Unearned Revenue
Dividends
Service Revenue
Salaries Expense
Totals
Supplies Expense
Salaries Payable
Totals
Net Income
Totals
(a)
PROBLEM 4-1B
4-61
PROBLEM 4-1B (Continued)

(b)
SASSE ROOFING INC.

Income Statement
Revenues
Service revenue ..........................................................
Expenses
Salaries expense ........................................................
Supplies expense.......................................................
Miscellaneous expense............................................
Depreciation expense ...............................................
Total expenses ...................................................
Net income.............................................................................
$6,680
$1,900
1,350
400
250
3,900
$2,780
SASSE ROOFING INC.

Retained earnings, March 1 .................................................................
Add: Net income....................................................................................
Less: Dividends......................................................................................
Retained earnings, March 31...............................................................
0
2,780
2,780
1,100
$1,680
SASSE ROOFING INC.

March 31, 2011
Assets
Equipment ....................................................................
Less: Accum. depreciationequipment...........
Current assets
Roofing supplies ........................................................
Accounts receivable..................................................
Cash................................................................................
Total assets...........................................................................
4-62
$11,000
1,500
650
3,200
4,500
$ 9,500
8,350
$17,850

SASSE ROOFING INC.
March 31, 2011
Equity
Share capitalordinary ............................................
Retained earnings.......................................................
Current liabilities
Accounts payable .......................................................
Salaries payable ..........................................................
Unearned revenue ......................................................
Total equity and liabilities ................................................
(c) Mar. 31
31
31
31
(d) Mar. 31
31
31
31
$12,900
1,680
2,500
600
170
Supplies Expense............................................
Roofing Supplies ....................................
1,350
Depreciation Expense....................................
Accumulated Depreciation ..................
250
Unearned Revenue..........................................
Service Revenue .....................................
380
Salaries Expense .............................................

Salaries Payable......................................
600
Service Revenue ..............................................

Income Summary....................................
6,680
Income Summary.............................................
Supplies Expense...................................
Miscellaneous Expense........................
3,900
Income Summary.............................................
2,780
Dividends ..................................................
1,100
$14,580
3,270
$17,850
1,350
250
380
600
6,680
1,900
1,350
250
400
2,780
1,100
4-63
PROBLEM 4-2B
(a)
RACHEL COMPANY INC.

Partial Worksheet
Adjusted
Trial Balance
Account
No.
101
112
126
130
151
152
200
201
212
230
311
320
332
400
610
631
711
722
726
905
4-64
Titles
Cash
Accounts Receivable
Supplies
Prepaid Insurance
Office Equipment
Acc. Depr.Off. Equip.
Notes Payable
Accounts Payable
Salaries Payable
Interest Payable
Retained Earnings
Dividends
Service Revenue
Advertising Expense
Supplies Expense
Insurance Expense
Salaries Expense
Interest Expense
Totals
Net Income
Totals
Dr.
8,100
10,800
1,500
2,000
24,000
Cr.
Income
Statement
Dr.
Cr.
Statement of
Financial Position
Dr.
8,100
10,800
1,500
2,000
24,000
5,600
15,000
6,100
2,400
600
10,000
5,800
5,600
15,000
6,100
2,400
600
10,000
5,800
7,000
7,000
61,000
8,400
4,000
5,600
3,500
31,000
600
106,500 106,500
Cr.
61,000
8,400
4,000
5,600
3,500
31,000
600
53,100
7,900
61,000
61,000
53,400
61,000
53,400
45,500
7,900
53,400

(b)
RACHEL COMPANY INC.

Income Statement
Revenues
Service revenue.....................................................
Expenses
Salaries expense...................................................
Advertising expense ............................................
Supplies expense .................................................
Interest expense....................................................
Total expenses..............................................
Net income .......................................................................
61,000
31,000
8,400
5,600
4,000
3,500
600
53,100
7,900
RACHEL COMPANY INC.

Retained earnings, January 1..........................................................
Add: Net income................................................................................
Less: Dividends ..................................................................................
Retained earnings, December 31 ...................................................
5,800
7,900
13,700
7,000
6,700
4-65

RACHEL COMPANY INC.
December 31, 2011
Assets
Office equipment ...................................................
Current assets
Supplies....................................................................
Cash...........................................................................
Total assets......................................................................
24,000
5,600
2,000
1,500
10,800
8,100
18,400
22,400
40,800

Equity
Notes payable.........................................................
Current liabilities
Notes payable.........................................................
Salaries payable ....................................................
4-66
10,000
6,700
16,700
6,000
9,000
6,100
2,400
600
18,100
40,800

(c)
General Journal
Date
Income Summary............................
Ref.
400
350
Debit
61,000
31 Income Summary.......................................
Advertising Expense......................
Supplies Expense ...........................
Interest Expense .............................
350
610
631
711
722
726
905
53,100
31 Income Summary.......................................
350
320
7,900
Dividends...........................................
320
332
7,000
J14
Credit
61,000
8,400
4,000
5,600
3,500
31,000
600
7,900
7,000
(d)
Date
Jan. 1
Dec. 31
31
Date
Explanation
Balance
Closing entry
Closing entry
Explanation
Dec. 31 Balance
31 Closing entry
Retained Earnings
Ref.
Debit

J14
J14
7,000
Dividends
Ref.

J14
Debit
Credit
5,800
7,900
No. 320
Balance
5,800
13,700
6,700
Credit
No. 332
Balance
7,000
7,000
0
7,000
4-67
Explanation
Closing entry
Closing entry
Closing entry
Income Summary
Ref.
Debit
J14
J14
53,100
J14
7,900
Explanation
Balance
Closing entry
Service Revenue
Ref.
Debit

J14 61,000
Explanation
Balance
Closing entry
Advertising Expense
Ref.
Debit

8,400
J14
Date
Dec. 31
31
Explanation
Balance
Closing entry
Supplies Expense
Ref.
Debit

4,000
J14
Date
Dec. 31
31
Explanation
Ref.
Debit

Balance
5,600
Closing entry
J14
Date
Dec.
Date
Dec.
Date
Dec.
Date
Dec.
4-68
31
31
31
31
31
31
31
31
31
Explanation
Balance
Closing entry
Insurance Expense
Ref.
Debit

3,500
J14
Credit
61,000
No. 350
Balance
61,000
7,900
0
Credit
61,000
No. 400
Balance
61,000
0
Credit
No. 610
Balance
8,400
0
8,400
Credit
4,000
Credit
5,600
Credit
3,500
No. 631
Balance
4,000
0
No. 711
Balance
5,600
0
No. 722
Balance
3,500
0
Date
Dec. 31
31
Date
Dec. 31
31
Explanation
Balance
Closing entry
Salaries Expense
Ref.
Debit

31,000
J14
Explanation
Balance
Closing entry
Interest Expense
Ref.
Debit

600
J14
(e)
Credit
31,000
Credit
600
No. 726
Balance
31,000
0
No. 905
Balance
600
0
RACHEL COMPANY INC.

December 31, 2011
Cash ................................................................................
Supplies .........................................................................
Office Equipment ........................................................
Accumulated DepreciationOffice
Equipment ................................................................
Notes Payable ..............................................................
Totals .....................................................................
Debit
8,100
10,800
1,500
2,000
24,000
46,400
Credit
5,600
15,000
6,100
2,400
600
10,000
6,700
46,400
4-69
PROBLEM 4-3B
(a)
MUDDY COMPANY
Income Statement
Revenues
Service revenue .....................................................
Expenses
Salaries expense ...................................................
Depreciation expense ..........................................
Insurance expense................................................
Repair expense ......................................................
Utilities expense ....................................................
Total expenses ..............................................
Net income........................................................................
$56,000
$30,000
2,100
1,800
1,600
1,400
36,900
$19,100
MUDDY COMPANY
Retained earnings, January 1 ..................................................
Add: Net income.........................................................................
$ 8,500
19,100
27,600
11,000
$16,600
Less: Dividends...........................................................................
Retained earnings, December 31............................................
MUDDY COMPANY
December 31, 2011
Assets
Equipment ...............................................................
Current assets
Cash...........................................................................
Total assets......................................................................
4-70
$21,000
4,500
2,800
10,800
17,900
$16,500
31,500
$48,000

MUDDY COMPANY
December 31, 2011
Equity
Share capitalordinary ....................................... $20,000
Retained earnings..................................................
16,600
Current liabilities
9,000
2,400
Total equity and liabilities............................................
$36,600
11,400
$48,000
(b)
Date
Dec. 31
31
31
31
General Journal
Service Revenue ........................................
Income Summary ............................
Ref.
400
350
Debit
56,000
Income Summary.......................................
Repair Expense................................
Salaries Expense.............................
Utilities Expense..............................
350
622
711
722
726
732
36,900
Income Summary.......................................
350
320
19,100
Dividends...........................................
320
332
11,000
Credit
56,000
1,600
2,100
1,800
30,000
1,400
19,100
11,000
4-71

(c)
12/31
Retained Earnings
No. 320
11,000 1/1 Bal.
8,500
12/31
19,100
12/31 Bal. 16,600
12/31 Bal.
Repair Expense
1,600 12/31
No. 622
1,600
Depreciation Expense No. 711

12/31 Bal.
2,100 12/31
2,100
12/31 Bal.
12/31
12/31
12/31
(d)
Dividends
11,000 12/31
No. 332
11,000
Insurance Expense
12/31 Bal.
1,800 12/31
No. 722
1,800
56,000
Salaries Expense
12/31 Bal. 30,000 12/31
No. 726
30,000
Service Revenue
No. 400
56,000 12/31 Bal. 56,000
Utilities Expense
12/31 Bal.
1,400 12/31
No. 732
1,400
Income Summary
36,900 12/31
19,100
56,000
No. 350
56,000
MUDDY COMPANY
December 31, 2011
Cash.................................................................................
Equipment .....................................................................
Accumulated Depreciation.......................................
Totals......................................................................
4-72
Debit
$17,900
10,800
2,800
21,000
$52,500
Credit
$ 4,500
9,000
2,400
20,000
16,600
$52,500
Account Titles
42,000
20,500
19,000
402,200
22,000
13,800
28,300
3,600
67,000
127,000
59,000
Dr.
402,200
90,700
29,000
12,500
6,000
120,000
100,000
44,000
Cr.
Trial Balance
4,700
(c)
23,900
(e) 11,000
1,200
3,000
4,000
(a)
(b)
(d)
Dr.
4,700
(e) 11,000
23,900
(c)
(b) 3,000
(d) 4,000
(a) 1,200
Cr.
Adjustments
420,900
11,000
4,700
1,200
3,000
42,000
20,500
19,000
22,000
13,800
28,300
2,400
67,000
127,000
59,000
Dr.
11,000
420,900
4,700
3,000
90,700
33,000
12,500
2,000
120,000
100,000
44,000
Cr.
Adjusted
Trial Balance
ROCKFORD MANAGEMENT SERVICES, INC.

Worksheet
101,400
22,300
123,700
11,000
4,700
1,200
3,000
42,000
20,500
19,000
Dr.
319,500
319,500
123,700
22,000
13,800
28,300
2,400
67,000
127,000
59,000
Dr.
11,000
297,200
22,300
319,500
4,700
3,000
12,500
2,000
120,000
100,000
44,000
Cr.
Statement of
Financial Position
123,700
90,700
33,000
Cr.
Income
Statement
Key: (a) Expired Insurance; (b) Depreciation ExpenseBuilding; (c) Depreciation ExpenseEquipment; (d) Rent Revenue Earned; (e) Accrued
Interest Payable.
Cash
Accounts Receivable
Prepaid Insurance
Land
Building
Equipment
Accounts Payable
Unearned Rent Revenue
Mortgage Note Payable
Retained Earnings
Dividends
Service Revenue
Rent Revenue
Salaries Expense
Advertising Expense
Utilities Expense
Totals
Insurance Expense
Depr. ExpenseBuilding
Accum. Depr.Building
Depr. ExpenseEquipment
Interest Expense
Interest Payable
Totals
Net Income
Totals
(a)
PROBLEM 4-4B
4-73

(b)
ROCKFORD MANAGEMENT SERVICES INC.

December 31, 2011
Assets
Land .......................................................
Building ................................................
Less: Accumulated
depreciationbuilding.......
Equipment ...........................................
Less: Accumulated
depreciationequipment ...
Current assets
Prepaid insurance .............................
Accounts receivable.........................
Cash.......................................................
Total assets..................................................
67,000
127,000
3,000
59,000
124,000
4,700
54,300
2,400
28,300
13,800
245,300
44,500
289,800

Equity
Share capitalordinary ..................................... 100,000
Retained earnings ................................................
44,300*
Mortgage note payable.......................................
Current liabilities
Current maturity of mortgage
note payable .......................................................
20,000
Accounts payable ................................................
12,500
Interest payable ....................................................
11,000
Unearned rent revenue.......................................
2,000
Total equity and liabilities ..........................................
144,300
100,000
45,500
289,800
*44,000 + 22,300 22,000
4-74

(c) Dec. 31
31
31
31
31
(d) Dec. 31
31
31
31
Insurance Expense .....................................

Prepaid Insurance ..............................
1,200
Depreciation ExpenseBuilding...........
Building.............................................
3,000
Depreciation ExpenseEquipment ......

Equipment........................................
4,700
Unearned Rent Revenue ...........................

Rent Revenue ......................................
4,000
Interest Expense..........................................
Interest Payable ..................................
11,000
Service Revenue..........................................
Rent Revenue ...............................................
Income Summary ...............................
90,700
33,000
Income Summary ........................................

Salaries Expense................................
Advertising Expense.........................
Interest Expense.................................
Utilities Expense.................................
Equipment........................................
Building.............................................
Insurance Expense ............................
101,400
Income Summary ........................................

Retained Earnings..............................
22,300
Retained Earnings ......................................

Dividends ..............................................
22,000
1,200
3,000
4,700
4,000
11,000
123,700
42,000
20,500
11,000
19,000
4,700
3,000
1,200
22,300
22,000
4-75

(e)
ROCKFORD MANAGEMENT SERVICES INC.

December 31, 2011
Cash.............................................................................
Accounts Receivable .............................................
Prepaid Insurance...................................................
Land.............................................................................
Building ......................................................................
Accumulated DepreciationBuilding..............
Equipment .................................................................
Accumulated DepreciationEquipment .........
Accounts Payable ...................................................
Interest Payable .......................................................
Unearned Rent Revenue .......................................
Mortgage Note Payable .........................................
Share CapitalOrdinary .......................................
Retained Earnings ..................................................
Debit
13,800
28,300
2,400
67,000
127,000
3,000
59,000
297,500
4-76
Credit
4,700
12,500
11,000
2,000
120,000
100,000
44,300
297,500
PROBLEM 4-5B
(a)
Date
July 1
12
18
20
21
25
31
31
General Journal
Cash...............................................................
Share CapitalOrdinary...............
Ref.
101
311
Debit
20,000
Equipment ...................................................
Cash ....................................................
Accounts Payable...........................
157
101
201
9,000
Cleaning Supplies.....................................
Accounts Payable...........................
128
201
2,100
Prepaid Insurance.....................................
Cash ....................................................
130
101
1,800
Accounts Receivable ...............................

Service Revenue .............................
112
400
4,500
Accounts Payable .....................................

Cash ....................................................
201
101
2,900
Salaries Expense.......................................
Cash ....................................................
726
101
2,000
Cash...............................................................
Accounts Receivable.....................
101
112
3,400
Accounts Receivable ...............................

Service Revenue .............................
112
400
9,000
Gas & Oil Expense ....................................

Cash ....................................................
633
101
350
Dividends .....................................................
Cash ....................................................
332
101
1,600
J1
Credit
20,000
4,000
5,000
2,100
1,800
4,500
2,900
2,000
3,400
9,000
350
1,600
4-77
4-78
350
2,000
37,700
1,600
10,750
10,100
2,100
1,800
9,000
Dr.
37,700
13,500
4,200
20,000
Cr.
Trial Balance
500
5,750
(c)
150
(d) 1,400
(b)
(e) 1,000
(a) 2,700
Dr.
500
(e) 1,000
5,750
(b)
(a) 2,700
(d) 1,400
(c)
150
Cr.
Adjustments
41,900
150
1,400
500
350
3,000
1,600
10,750
12,800
700
1,650
9,000
Dr.
1,000
41,900
500
16,200
4,200
20,000
Cr.
Adjusted
Trial Balance
CHANGS CLEANING SERVICES INC.

Worksheet
For the Month Ended July 31, 2011
5,400
10,800
16,200
150
1,400
500
350
3,000
Dr.
16,200
16,200
16,200
Cr.
Income
Statement
36,500
36,500
1,600
10,750
12,800
700
1,650
9,000
Dr.
1,000
25,700
10,800
36,500
500
4,200
20,000
Cr.
Statement of
Financial Position
Key: (a) Service Revenue Earned; (b) Depreciation Expense; (c) Insurance Expired; (d) Cleaning Supplies Used; (e) Unpaid Salaries.
Cash
Accounts Receivable
Cleaning Supplies
Prepaid Insurance
Equipment
Accounts Payable
Dividends
Service Revenue
Gas & Oil Expense
Salaries Expense
Totals
Insurance Expense
Salaries Payable
Totals
Net Income
Totals
Account Titles
(b) & (c)

(a), (e) & (f)
Date
Explanation
July 1
1
5
18
20
21
31
31
Date
Explanation
July 12
21
25
31 Adjusting
Date
July 3
31
Explanation
Adjusting
Date
Explanation
July 5
31 Adjusting
Date
Explanation
July 1
Cash
Ref.
J1
J1
J1
J1
J1
J1
J1
J1
Debit
20,000
4,000
1,800
2,900
2,000
3,400
350
1,600
Accounts Receivable
Ref.
Debit
J1
4,500
J1
J1
9,000
J2
2,700
Cleaning Supplies
Ref.
Debit
J1
2,100
J2
Prepaid Insurance
Ref.
Debit
J1
1,800
J2
Equipment
Ref.
J1
Credit
Debit
Credit
3,400
Credit
1,400
No. 101
Balance
20,000
16,000
14,200
11,300
9,300
12,700
12,350
10,750
No. 112
Balance
4,500
1,100
10,100
12,800
No. 128
Balance
2,100
700
150
No. 130
Balance
1,800
1,650
Credit
No. 157
Balance
Credit
9,000
9,000
4-79
Date
July 31
Date
July 1
3
18
Date
July 31
Date
July 1
Date
July 1
31
31
Date
July 31
31
Date
July 31
31
31
4-80
Explanation
Ref.
Debit
Credit
Adjusting
J2
500
Explanation
Explanation
Adjusting
Explanation
Explanation
Accounts Payable
Ref.
Debit
J1
J1
J1
2,900
Salaries Payable
Ref.
Debit
J2
Ref.
Debit
J1
Retained Earnings
Ref.
Debit
Closing
Closing
Explanation
Closing
Explanation
Closing
Closing
Closing
J3
J3
Dividends
Ref.
J1
J3
Credit
1,000
Credit
20,000
No. 311
Balance
20,000
Credit
No. 320
Balance
1,600
Debit
1,600
No. 201
Balance
5,000
7,100
4,200
No. 212
Balance
1,000
10,800
Income Summary
Ref.
Debit
J3
J3
5,400
J3
10,800
Credit
5,000
2,100
No. 158
Balance
500
Credit
1,600
Credit
16,200
10,800
9,200
No. 332
Balance
1,600
0
No. 350
Balance
16,200
10,800
0
Date
July 12
25
31
31
Date
July 31
31
Date
July 31
31
Date
July 31
31
Date
July 31
31
Date
July 20
31
31
Explanation
Adjusting
Closing
Explanation
Closing
Service Revenue
Ref.
Debit
J1
J1
J2
J3
16,200
Gas & Oil Expense
Ref.
Debit
J1
350
J3

Explanation
Ref.
Debit
Adjusting
J2
1,400
Closing
J3
Explanation
Adjusting
Closing
Ref.
Debit
J2
500
J3
Explanation
Adjusting
Closing
Insurance Expense
Ref.
Debit
J2
150
J3
Explanation
Adjusting
Closing
Salaries Expense
Ref.
Debit
J1
2,000
J2
1,000
J3
Credit
4,500
9,000
2,700
No. 400
Balance
4,500
13,500
16,200
0
Credit
No. 633
Balance
350
0
350
Credit
1,400
Credit
500
Credit
150
Credit
3,000
No. 634
Balance
1,400
0
No. 711
Balance
500
0
No. 722
Balance
150
0
No. 726
Balance
2,000
3,000
0
4-81

(d)
CHANGS CLEANING SERVICE INC.

Income Statement
Revenues
Service revenue.......................................................
Expenses
Cleaning supplies expense .................................
Gas & oil expense...................................................
Total expenses ...............................................
Net income.........................................................................
$16,200
$3,000
1,400
500
350
150
5,400
$10,800

Retained earnings, July 1 .............................................
Add: Net income ............................................................
$
0
10,800
10,800
1,600
$ 9,200
Less: Dividends ..............................................................

Retained earnings, July 31 ...........................................

July 31, 2011
Assets
Equipment.................................................................
Less: Accumulated depreciation .....................
4-82
$ 9,000
500
$ 8,500

July 31, 2011
Assets (Continued)
Current assets
Prepaid insurance ..................................................
Cleaning supplies ..................................................
Accounts receivable..............................................
Cash............................................................................
Total assets........................................................................
1,650
700
12,800
10,750
25,900
$34,400

Equity
Share capitalordinary .......................................
Retained earnings ..................................................
Current liabilities
Total equity and liabilities ............................................
$20,000
9,200
4,200
1,000
$29,200
5,200
$34,400
(e)
Date
July 31
31
31
31
31
General Journal
Accounts Receivable..............................
Service Revenue............................
Ref.
112
400
Debit
2,700
Depreciation Expense ............................

Equipment...................................
711
500
Insurance Expense..................................
Prepaid Insurance.........................
722
130
150
Cleaning Supplies Expense .................

Cleaning Supplies.........................
634
128
1,400
Salaries Expense .....................................

Salaries Payable ............................
726
212
1,000
2,700
158
J2
Credit
500
150
1,400
1,000
4-83

(f)
Date
July 31
31
31
31
(g)
General Journal
Service Revenue .......................................
Income Summary ...........................
Ref.
400
350
Debit
16,200
Income Summary......................................
Salaries Expense ...........................
Depreciation Expense ..................
Insurance Expense........................
Cleaning Supplies Expense .......
Gas & Oil Expense.........................
350
726
711
722
634
633
5,400
Income Summary......................................
Retained Earnings .........................
350
320
10,800
Retained Earnings....................................
Dividends..........................................
320
332
1,600
16,200
3,000
500
150
1,400
350
10,800
1,600

July 31, 2011
Cash ................................................................................
Cleaning Supplies ......................................................
Equipment.....................................................................
Accumulated DepreciationEquipment ............
Share CapitalOrdinary ..........................................
Retained Earnings......................................................
Debit
$10,750
12,800
700
1,650
9,000
Credit
$34,900
4-84
J3
Credit
500
4,200
1,000
20,000
9,200
$34,900
COMPREHENSIVE PROBLEM: CHAPTERS 2 TO 4
(a)
Date
July 1
12
18
20
21
25
31
31
General Journal
Cash ..............................................................
Share CapitalOrdinary.............
Ref.
101
311
Debit
14,000
Equipment...................................................
Cash ..................................................
157
101
201
10,000
Cleaning Supplies ....................................

128
201
800
Prepaid Insurance ....................................

Cash ..................................................
130
101
1,800
Accounts Receivable...............................
Service Revenue ...........................
112
400
3,800
Accounts Payable.....................................
Cash ..................................................
201
101
1,400
Salaries Expense ......................................

Cash ..................................................
726
101
1,600
Cash ..............................................................
Accounts Receivable...................
101
112
1,400
Accounts Receivable...............................
Service Revenue ...........................
112
400
1,500
Gas & Oil Expense ...................................

Cash ..................................................
633
101
400
Dividends ....................................................
Cash ..................................................
332
101
600
J1
Credit
14,000
3,000
7,000
800
1,800
3,800
1,400
1,600
1,400
1,500
400
600
4-85
4-86
400
1,600
25,700
600
6,600
3,900
800
1,800
10,000
Dr.
25,700
5,300
6,400
14,000
Cr.
Trial Balance
150
700
(c)
(d)
2,850
200
500
(b)
(e)
(a) 1,300
Dr.
700
150
(e)
(b)
500
2,850
200
(a) 1,300
(d)
(c)
Cr.
Adjustments
27,700
150
700
200
400
2,100
600
6,600
5,200
100
1,650
10,000
Dr.
500
27,700
200
6,600
6,400
14,000
Cr.
Adjusted
Trial Balance
JULIES MAIDS CLEANING SERVICE INC.

Worksheet
3,550
3,050
6,600
150
700
200
400
2,100
Dr.
24,150
24,150
6,600
600
6,600
5,200
100
1,650
10,000
Dr.
500
21,100
3,050
24,150
200
6,400
14,000
Cr.
Statement of
Financial Position
6,600
6,600
Cr.
Income
Statement
Key: (a) Service Revenue; (b) Depreciation Expense; (c) Insurance Expired; (d) Cleaning Supplies Used; (e) Unpaid Salaries.
Cash
Accounts Receivable
Cleaning Supplies
Prepaid Insurance
Equipment
Accounts Payable
Dividends
Service Revenue
Gas & Oil Expense
Salaries Expense
Total
Insurance Expense
Salaries Payable
Totals
Net Income
Totals
Account Titles
(b) & (c)
COMPREHENSIVE PROBLEM (Continued)

(a), (e) & (f)
Date
July 1
1
5
18
20
21
31
31
Date
July 12
21
25
31
Date
July 3
31
Date
July 5
31
Date
July 1
Explanation
Explanation
Adjusting
Explanation
Adjusting
Explanation
Adjusting
Explanation
Cash
Ref.
J1
J1
J1
J1
J1
J1
J1
J1
Debit
14,000
3,000
1,800
1,400
1,600
1,400
400
600
Accounts Receivable
Ref.
Debit
J1
3,800
J1
J1
1,500
J2
1,300
Cleaning Supplies
Ref.
Debit
J1
800
J2
Prepaid Insurance
Ref.
Debit
J1
1,800
J2
Equipment
Ref.
J1
Credit
Debit
10,000
Credit
1,400
Credit
700
Credit
150
Credit
No. 101
Balance
14,000
11,000
9,200
7,800
6,200
7,600
7,200
6,600
No. 112
Balance
3,800
2,400
3,900
5,200
No. 128
Balance
800
100
No. 130
Balance
1,800
1,650
No. 157
Balance
10,000
4-87
Date
July 31
Date
July 1
3
18
Date
July 31
Date
July 1
Date
July 31
31
Date
July 31
31
Date
July 31
31
31
4-88
Explanation
Ref.
Debit
Credit
Adjusting
J2
200
Explanation
Explanation
Adjusting
Explanation
Explanation
Closing
Closing
Explanation
Closing
Explanation
Closing
Closing
Closing
Accounts Payable
Ref.
Debit
J1
J1
J1
1,400
Salaries Payable
Ref.
Debit
J2
Ref.
Debit
J1
Retained Earnings
Ref.
Debit
J3
J3
600
Dividends
Ref.
J1
J3
Debit
600
Income Summary
Ref.
Debit
J3
J3
3,550
J3
3,050
Credit
7,000
800
No. 158
Balance
200
No. 201
Balance
7,000
7,800
6,400
Credit
500
No. 212
Balance
500
Credit
14,000
No. 311
Balance
14,000
Credit
3,050
No. 320
Balance
3,050
2,450
Credit
No. 332
Balance
600
0
600
Credit
6,600
No. 350
Balance
6,600
3,050
0
Date
July 12
25
31
31
Date
July 31
31
Explanation
Adjusting
Closing
Explanation
Closing
Service Revenue
Ref.
Debit
J1
J1
J2
J3
6,600
Gas & Oil Expense
Ref.
Debit
J1
400
J3
Date
July 31
31

Explanation
Ref.
Debit
Adjusting
J2
700
Closing
J3
Date
July 31
31
Explanation
Adjusting
Closing
Ref.
Debit
J2
200
J3
Explanation
Adjusting
Closing
Insurance Expense
Ref.
Debit
J2
150
J3
Date
July 31
31
Date
July 20
31
31
Explanation
Adjusting
Closing
Salaries Expense
Ref.
Debit
J1
1,600
J2
500
J3
Credit
3,800
1,500
1,300
No. 400
Balance
3,800
5,300
6,600
0
Credit
No. 633
Balance
400
0
400
Credit
700
Credit
200
Credit
150
Credit
2,100
No. 634
Balance
700
0
No. 711
Balance
200
0
No. 722
Balance
150
0
No. 726
Balance
1,600
2,100
0
4-89

(d)

Income Statement
Revenues
Service revenue.......................................................
Expenses
Cleaning supplies expense .................................
Gas & oil expense...................................................
Total expenses ...............................................
Net income.........................................................................
$6,600
$2,100
700
400
200
150
3,550
$3,050

Retained earnings, July 1 ..............................................................
Add: Net income .............................................................................
Less: Dividends ...............................................................................
Retained earnings, July 31 ............................................................
4-90
$
0
3,050
3,050
600
$2,450

July 31, 2011
Assets
Equipment .................................................................
Less: Accumulated depreciation ......................
Current assets
Prepaid insurance ...................................................
Cleaning supplies ...................................................
Accounts receivable...............................................
Cash.............................................................................
Total assets........................................................................
$10,000
200
1,650
100
5,200
6,600
$ 9,800
13,550
$23,350

Equity
Share capitalordinary ........................................
Retained earnings ...................................................
Current liabilities
Accounts payable ...................................................
Salaries payable ......................................................
Total equity and liabilities .............................................
$14,000
2,450
6,400
500
$16,450
6,900
$23,350
4-91

(e)
Date
July 31
31
31
31
31
General Journal
Service Revenue ...........................
Ref.
112
400
Debit
1,300

Equipment ..................................
711
200
Prepaid Insurance ........................
722
130
150
Cleaning Supplies Expense.................

Cleaning Supplies ........................
634
128
700
Salaries Expense.....................................
Salaries Payable............................
726
212
500
J2
Credit
1,300
158
200
150
700
500
(f)
Date
July 31
31
31
31
4-92
General Journal
Service Revenue......................................
Income Summary..........................
Ref.
400
350
Debit
6,600
Income Summary ....................................

Salaries Expense ..........................
Depreciation Expense .................
Insurance Expense.......................
Cleaning Supplies Expense ......
Gas & Oil Expense .......................
350
726
711
722
634
633
3,550
Income Summary ....................................

Retained Earnings........................
350
320
3,050
Retained Earnings ..................................

Dividends ........................................
320
332
600
J3
Credit
6,600
2,100
200
150
700
400
3,050
600

(g)

July 31, 2011
Cash.................................................................................
Cleaning Supplies.......................................................
Equipment .....................................................................
Accumulated DepreciationEquipment .............
Debit
$ 6,600
5,200
100
1,650
10,000
$
$23,550
Credit
200
6,400
500
14,000
2,450
$23,550
4-93
BYP 4-1
FINANCIAL REPORTING PROBLEM
(a)
Total current assets were 2,635 million at December 31, 2008, and
2,600 million at December 31, 2007.
(b)
Current assets are properly listed in the reverse order of liquidity. As

you will learn in the next chapter, inventory is considered to be less
liquid than receivables. Thus, it is listed above receivables.
(c)
The primary asset classifications are similar to the text: (1) goodwill,
(2) intangible assets, (3) property, plant, and equipment, (4) investments,
and (5) current assets.
(d)
Cash equivalents are investments with original maturities of 3 months

or less that Cadbury does not intend to rollover beyond three months.
(e)
Total current liabilities were 3,388 million at December 31, 2008, and
4,614 million at December 31, 2007.
4-94
BYP 4-2
(a)
COMPARATIVE ANALYSIS PROBLEM
(in millions)
1.
2.
3.
4.
Cadbury
Nestl
2,635
1,761
3,388
3,534
CHF33,048
21,097
33,223
54,916
Total current assets

Net property, plant & equipment
Total current liabilities
Total equity
(b) Current assets are cash and other resources that are reasonably expected to be realized in cash or sold or consumed within one year or
the companys operating cycle, whichever is longer. Current liabilities
are obligations that are reasonably expected to be paid from existing
current assets or through the creation of other current liabilities.
Cadbury current liabilities were 29% greater than its current assets, but
Nestls current assets were approximately the same as its current
liabilities. From this information, it appears that Nestl is in a better
liquidity position than Cadbury.
4-95
BYP 4-3
EXPLORING THE WEB
The solution is dependent upon the companies chosen by the student.
4-96
BYP 4-4
(a)
DECISION MAKING ACROSS THE ORGANIZATION
WHITEGLOVES JANITORIAL SERVICE INC.

December 31, 2011
Assets
Cleaning equipment
($22,000 + $4,000)............................
Less: Accum. depreciation
cleaning equipment
($4,000 + $2,000).....................
Delivery trucks ($34,000 + $5,000) ....
Less: Accum. depreciation
delivery trucks
($5,000 + $5,000).....................
Current assets
Prepaid insurance ($4,800 X 2/3).........
Janitorial supplies
($5,200 $2,700) ..............................
Accounts receivable
($9,000 + $3,700) ..............................
Cash.........................................................
Total assets....................................................
$26,000
6,000
39,000
$20,000
10,000
29,000
$49,000
3,200
2,500
12,700
6,500
24,900
$73,900

Equity
Share capitalordinary .......................................... $40,000
Retained earnings .....................................................
4,650* $44,650
Notes payable, due July 1, 2012...........................
15,000
Current liabilities
Notes payable due within one year ..................... 10,000
Accounts payable ($2,500 + $500).......................
3,000
Interest payable ($25,000 X 10% X 6/12) ............
1,250
14,250
Total equity and liabilities .................................................
$73,900
4-97
BYP 4-4 (Continued)

WHITEGLOVES JANITORIAL SERVICE INC.
December 31, 2011
*Retained earnings balance as reported .................
Add: Earned but unbilled fees.................................
Less: Janitorial supplies used .................................
Insurance expired ($4,800 X 1/3)..................
Expenses incurred but unpaid .....................
Interest accrued.................................................
Depreciation ($2,000 + $5,000)......................
Total..............................................................
Retained earnings balance as adjusted .................
$14,000
3,700
17,700
$2,700
1,600
500
1,250
7,000
13,050
$ 4,650
(b) Whitegloves Janitorial Service met the terms of the bank loan because
current assets exceed current liabilities by $10,650 ($24,900 $14,250)
at December 31, 2011.
4-98
BYP 4-5
COMMUNICATION ACTIVITY
MEMO
To:
Accounting Instructor
From:
Student
Re:
Accounting Cycle
The required steps in the accounting cycle, in the order in which they
should be completed, are:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Analyze business transactions.

Journalize the transactions.
Post to ledger accounts.
Prepare a trial balance.
Journalize and post adjusting entries.
Prepare an adjusted trial balance.
Prepare financial statements.
Journalize and post closing entries.
Prepare a post-closing trial balance.
The optional steps in the accounting cycle include preparing a worksheet

and preparing reversing entries. If a worksheet is prepared, it is done after
step 3 above, and it includes steps 4 and 6. The worksheet is a form used
to make it easier to prepare adjusting entries and financial statements. If reversing entries are prepared, they are journalized and posted after step 9,
at the beginning of the next accounting period. A reversing entry is the
exact opposite of a previously recorded adjusting entry and simplifies the
recording of subsequent transactions.
4-99
BYP 4-6
ETHICS CASE
(a) The stakeholders in this case are:

You, as controller.
Jerry McNabb, president.
Users of the companys financial statements.
(b) The ethical issue is the continued circulation of significantly misstated

financial statements. As controller, you have just issued misleading
financial statements. You have acted ethically by telling the companys
president. The president has reacted unethically by allowing the misleading financial statements to continue to circulate.
(c) As controller, you should impress upon the president the consequences
of having those misleading financial statements be detected by some
user or securities regulator. Also stress upon him that you have a
professional obligation to correct the statements or to resign.
4-100

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CHAPTER 4

Completing the Accounting Cycle

1A, 2A, 3A,

1B, 2B, 3B,

Explain the process

1A, 2A, 3A,

1B, 2B, 3B,

Describe the content and

1A, 2A, 3A,

1B, 2B, 3B,

State the required steps

Explain the approaches

Identify the sections of a

14, 15, 16,

1A, 2A, 3A,

Prepare reversing entries.

1B, 2B, 3B,

Copyright 2011 John Wiley & Sons, Inc.

Weygandt, IFRS, 1/e, Solutions Manual

(For Instructor Use Only)

ASSIGNMENT CHARACTERISTICS TABLE

Prepare worksheet, financial statements, and adjusting

Complete worksheet; prepare financial statements,

Prepare financial statements, closing entries, and postclosing trial balance.

Complete worksheet; prepare classified statement

Complete all steps in accounting cycle.

Analyze errors and prepare correcting entries and trial

Prepare worksheet, financial statements, and adjusting

Complete worksheet; prepare financial statements,

Prepare financial statements, closing entries, and postclosing trial balance.

Complete worksheet; prepare classified statement

Complete all steps in accounting cycle.

Comprehensive Problem: Chapters 2 to 4

Copyright 2011 John Wiley & Sons, Inc.

Weygandt, IFRS, 1/e, Solutions Manual

(For Instructor Use Only)

Copyright 2011 John Wiley & Sons, Inc.

Weygandt, IFRS, 1/e, Solutions Manual

(For Instructor Use Only)

COMPLETING THE ACCOUNTING CYCLE (Continued)

Copyright 2011 John Wiley & Sons, Inc.

Weygandt, IFRS, 1/e, Solutions Manual

(For Instructor Use Only)

Copyright 2011 John Wiley & Sons, Inc.

Weygandt, IFRS, 1/e, Solutions Manual

State the required steps in

Explain the approaches to

Identify the sections of

Prepare reversing entries.

Broadening Your Perspective

Describe the content and

Explain the process of closing

BLOOMS TAXONOMY TABLE

(For Instructor Use Only)

(Dr) Individual revenue accounts and (Cr) Income Summary.

Copyright 2011 John Wiley & Sons, Inc.

Weygandt, IFRS, 1/e, Solutions Manual

(For Instructor Use Only)

Questions Chapter 4 (Continued)

Equity and Liabilities

Salaries Expense ...................................................................................

Copyright 2011 John Wiley & Sons, Inc.