COMPLETING THE ACCOUNTING CYCLE

1.The following balance sheet contains errors.

Billy Brown Services Co.

Balance Sheet
For the Year Ended December 31, 2007

Assets Liabilities
Current assets: Current liabilities:
Cash $ 6,170 Accounts receivable $ 9,000
Accounts payable 8,500 Accum. depr-building 13,525
Supplies 1,590 Accum. depr-equipment 6,340
Prepaid insurance 345 Net income 12,500
Land 25,000
Total current assets $ 41,605 Total liabilities $ 41,365

Owner's Equity
Property, plant, and Wages payable $ 500
equipment:
Building $45,500 Billy Brown, capital 74,490
Equipment 28,250 Total owner's equity $ 74,990
Total property, plant,
and equipment 73,750
Total liabilities and
Total assets $116,355 owner's equity $116,355

(a) List the errors in the balance sheet above and (b) prepare a corrected balance sheet.
2. The following is the adjusted trial balance for Steely Company.

Steely Company
Adjusted Trial Balance
For the Year ended December 31, 2008

Cash 6,130
Accounts Receivable 2,300
Prepaid Expenses 750
Equipment 13,400
Accumulated Depreciation 1,200
Accounts Payable 1,700
Notes Payable - Due on June 30, 2009 5,000
Bob Steely, Capital 12,000
Bob Steely, Withdrawals 870
Fees Earned 6,600
Wages Expense 1,450
Rent Expense 900
Utilities Expense 475
Depreciation Expense 150
Miscellaneous Expense 75
Totals 26,500 26,500

Prepare an Income Statement, Balance Sheet, and Statement of Owner’s Equity. Assume that the capital
account started with a beginning balance of $10,000.
3. Prepare an income statement and a statement of owner’s equity, for the month ended October 31, 2008,
from the following T-Accounts.

Prepaid Accounts Unearned Wages

Insurance Receivable. Revenues Payable
1200 6000 1350 475
100 500 350

MN, Capital MN, Drawing Income Fees Earned

Summary
7000 3500 8850 8000
3000 3500 4535 500
4515 4515 350
3500 8850

Wages Rent Expense Insurance Utilities

Expense Expense Expense
2600 1280 100 80
475 1280 100 80
3075
4. Prepare an income statement and a statement of owner’s equity for the month ended November 30, 2008
from the T-accounts below.

Prepaid Accounts Unearned Wages

Insurance Receivable. Revenues Payable
1200 2000 1350 475
100 500 350

MN, Capital MN, Drawing Income Fees Earned

Summary
7000 2600 5850 5000
3000 2600 6035 500
185 185 350
2600 5850

Wages Rent Expense Insurance Utilities

Expense Expense Expense
3600 1780 100 80
475 1780 100 80
4075
5. Selected ledger accounts appear below for Construction Services for 2007.

Flynn, Capital Flynn, Drawing

12/31 15,000 1/1 20,000 3/31 12,000 12/31 15,000
12/31 45,000 12/22 3,000

Income Summary
12/31 19,000 12/31 64,000
12/31 45,000

Prepare a statement of owner's equity.

6. On the basis of the following data taken from the Adjusted Trial Balance columns of the work sheet for
the year ended October 31 for Shore Co., journalize the four closing entries.

Cash $ 21,500
Accounts Receivable 45,200
Supplies 5,000
Equipment 169,900
Accumulated Depreciation $ 69,000
Accounts Payable 42,500
Stan Shore, Capital 152,600
Stan Shore, Drawing 30,000
Fees Earned 404,500
Salary Expense 300,500
Rent Expense 60,000
Depreciation Expense 25,000
Supplies Expense 9,500
Miscellaneous Expense 2,000
$668,600 $668,600

7. After all adjustments have been made, but before the accounts have been closed, the following balances
were taken from the ledger:

Accounts Payable $ 40,000 Rent Expense $ 21,400

Accounts Receivable 54,500 Salary Expense 66,000
Accumulated Depreciation 83,325 Salaries Payable 150
Cash 7,150 Service Revenue 151,000
Depreciation Expense 23,500 Supplies 2,500
Equipment 155,000 Supplies Expense 3,500
Insurance Expense 8,600 Ray Felon, Capital 100,950
Prepaid Insurance 5,275 Ray Felon, Drawing 28,000

Journalize the entries to close the appropriate accounts.

8. On the basis of the following information taken from the Adjusted Trial Balance columns of the work
sheet for the month ended November 30th, journalize the closing entries.
 Cash $12,500.00
Accounts Receivable 4,575.00
Office Supplies 1,850.00
Repair Parts 4,785.00
Machinery 14,750.00
Accumulated Depreciation 2,950.00
Accounts Payable 1,750.00
Notes Payable 7,500.00
FGH, Capital 2,750.00
FGH. Drawing 2,500.00
Service Revenue 32,500.00
Wages Expense 3,840.00
Office Supplies Expense 275.00
Repair Parts Expense 1,925.00
Depreciation Expense 450.00
$47,450.00 $47,450.00

9. The following adjusted trial balance is the result of the adjustments made at the end of the month of May
for Jenni Linn Company. Utilize these adjusted values to perform the closing entries for Jenni Linn
Company.
Cash $14,750.00
Accounts Receivable 3,750.00
Office Supplies 1,525.00
Store Supplies 4,785.00
Machinery 19,750.00
Accumulated Depreciation 3,150.00
Accounts Payable 1,550.00
Notes Payable 5,500.00
Jenni Linn, Capital 29,725.00
Jenni Linn, Drawing 3,250.00
Service Revenue 16,500.00
Wages Expense 4,425.00
Office Supplies Expense 465.00
Store Supplies Expense 3,150.00
Depreciation Expense 575.00 ________
$56,425.00 $56,425.00

10. The following adjusted trial balance is the result of the adjustments made at the end of the month of
March for Jenni Linn Company. Utilize these adjusted values to perform the closing entries for Jenni Linn
Company.
Cash $14,750.00
Accounts Receivable 3,750.00
Office Supplies 1,525.00
Store Supplies 4,785.00
Machinery 19,750.00
 Accumulated Depreciation 5,150.00
Accounts Payable 4,300.00
Notes Payable 9,500.00
Jenni Linn, Capital 29,725.00
Jenni Linn, Drawing 3,250.00
Service Revenue 11,500.00
Wages Expense 4,425.00
Rent Expense 2,000.00
Advertising Expense 1,750.00
Office Supplies Expense 465.00
Store Supplies Expense 3,150.00
Depreciation Expense 575.00
$60,175.00 $60,175.00

11. Based on the following worksheet, prepare and income statement, statement of owner’s capital, and
balance sheet for Mantle Enterprises.

Mantle Enterprises
Worksheet
For the Year Ended December 31, 2008
Adjusted Trial Balance Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit
Cash 16,000 16,000
Accounts Receivable 6,000 6,000
Supplies 2,000 2,000
Equipment 19,000 19,000
Accumulated Depr-Equip 6,000 6,000
Accounts Payable 10,000 10,000
Wages Payable 2,000 2,000
Mantle, Capital 7,000 7,000
Owner’s Equity 4,000 4,000
Mantle, Drawing 1,000 1,000
Fees Earned 47,000 47,000
Wages Expense 21,000 21,000
Rent Expense 6,000 6,000
Depreciation Expense 5,000 5,000
Totals 76,000 76,000 32,000 47,000 44,000 29,000
Net Income (Loss) 15,000 15,000
47,000 47,000 44,000 44,000
12. Prepare closing entries from the following work sheet.
Mantle Enterprises
Worksheet
For the Year Ended December 31, 2008
Adjusted Trial Balance Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit
Cash 16,000 16,000
Accounts Receivable 6,000 6,000
Supplies 2,000 2,000
Equipment 19,000 19,000
Accumulated Depr-Equip 6,000 6,000
Accounts Payable 10,000 10,000
Wages Payable 2,000 2,000
Mantle, Capital 7,000 7,000
Owner’s Equity 4,000 4,000
Drawings 1,000 1,000
Fees Earned 47,000 47,000
Wages Expense 21,000 21,000
Rent Expense 6,000 6,000
Depreciation Expense 5,000 5,000
Totals 76,000 76,000 32,000 47,000 44,000 29,000
Net Income (Loss) 15,000 15,000
47,000 47,000 44,000 44,000

13. The following is the adjusted trial balance for Steely Company.

Steely Company
Adjusted Trial Balance
For the Year ended December 31, 2008

Cash 6,130
Accounts Receivable 2,300
Prepaid Expenses 750
Equipment 13,400
Accumulated Depreciation 1,200
Accounts Payable 1,700
Notes Payable - Due on June 30, 2009 5,000
Bob Steely, Capital 12,000
Bob Steely, Withdrawals 870
Fees Earned 6,600
Wages Expense 1,450
Rent Expense 900
Utilities Expense 475
Depreciation Expense 150
Miscellaneous Expense 75
Totals 26,500 26,500

Prepare closing entries and the post closing trial balance.

14. Reconstruct the adjusting and closing entries from the following T-Accounts.

Prepaid Accounts Unearned Wages

Insurance Receivable. Revenues Payable
1200 6000 1350 475
100 500 350

MN, Capital MN, Drawing Income Fees Earned

Summary
7000 3500 8850 8000
4515 3500 4535 500
3500 4515 350
8850

Wages Rent Expense Insurance Utilities

Expense Expense Expense
2600 1280 100 80
475 1280 100 80
3075

15. Reconstruct adjusting and closing entries for the month ended November 30, 2008 from the T-accounts
below.

Prepaid Accounts Unearned Wages

Insurance Receivable. Revenues Payable
1200 2000 1350 475
100 500 350

MN, Capital MN, Drawing Income Fees Earned

Summary
7000 2600 5850 5000
3000 2600 6035 500
185 185 350
2600 5850

Wages Rent Expense Insurance Utilities

Expense Expense Expense
3600 1780 100 80
475 1780 100 80
4075
16.
1) Reconstruct the entries for the month ended February 28, 2008 from the T-accounts
below. Record them as follows:
A - L Journal Entries
M- R Adjusting Journal Entries
2) Balance and prepare the Income Statement, Statement of Owner’s Equity, and the
Balance Sheet from the T-Accounts.

3) Prepare the four closing entries (S - V).

4) Prepare the Post-Closing Trial Balance.

Cash Accounts Supplies Prepaid

Receivable Insurance
7000 1000 670 2400
700 585 360 200
600
350
2400
2500
50
400
930

Equipment Accumulated Accounts Wages

Depreciation Payable Payable
3000 30 670 125

Unearned DL, Capital DL, Drawing Income

Revenues Summary
930 7000 400
450 3000

Fees Earned Wages Rent Expense Supplies

Expense Expense
700 360 600 350
1000 125
2500
585
450
 Insurance Depreciation Miscellaneous
Expense Expense Expense
200 30 50

17. The balances in the ledger of Landscape Services as of December 31, 2007 before adjustments, are as
follows:

Cash $ 4,500 Tim Welch, Capital $33,050

Supplies 4,150 Tim Welch, Drawing 2,900
Prepaid Insurance 8,700 Service Revenue 52,500
Equipment 42,000 Salary Expense 26,600
Accumulated Rent Expense 5,000
Depreciation 10,200 Miscellaneous Expense 1,900

Adjustment data are as follows: supplies on hand, December 31, $1,000; insurance expired for
December, $900; depreciation on equipment for December, $1,500; salaries accrued, December 31,
$1,000.

(a) Prepare a ten-column work sheet for Landscape Services for December, 2007.
(b) On the basis of the work sheet in (a), present the following in good order: (1) income
statement, (2) statement of owner's equity (no additional investments were made during
the month), and (3) balance sheet.
(c) On the basis of the work sheet in (a), journalize the closing entries as of December 31,
2007.

18. Complete the following worksheet for Mantle Enterprises.

Mantle Enterprises
Worksheet
For the Year Ended December 31, 2008
Adjusted Trial Balance Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit
Cash 16,000
Accounts Receivable 6,000
Supplies 2,000
Equipment 19,000
Accumulated Depr- 6,000
Equip
Accounts Payable 10,000
Wages Payable 2,000
Mantle, Capital 7,000
Owner’s Equity 4,000
Mantle, Drawing 1,000
Fees Earned 47,000
Wages Expense 21,000
Rent Expense 6,000
Depreciation Expense 5,000
Totals 76,000 76,000
Net Income (Loss)