Exam 5: Adjustments and the Worksheet

MacGyver Company bought equipment on January 3,2016,for $34,000.At the time of purchase,the equipment was estimated to have a useful life of six years and a salvage value of $880.Using the straight-line method,the amount of one year's depreciation is

On November 1,2016,Peaches Consulting Service paid $4,800 for 12 months of advance rent on its office space.The correct adjusting entry on December 31 to show the amount of rent that had expired would include:

Accumulated Depreciation,Equipment,is shown as:

The adjusting entry to account for the use of supplies consists of

On March 1,2016,the company paid $6,000 rent in advance for a 12-month period.On December 31,2016,the company's adjustment for expired rent would include:

The cost of a long-term asset,such as equipment,is transferred to expense as it is used during its life.

On a worksheet,the adjusted balance of the Supplies account is extended to:

The balances of the ledger accounts for Lance's Landscaping Design on March 31,2016,and the information needed for adjustments are shown below.Prepare the Trial Balance section,record the adjustments,and complete the worksheet. Adjustment information: (a)The supplies were purchased on March 1,2016.An inventory of supplies showed $300 on hand on March 31,2016. (b)The amount of Prepaid Insurance represents a payment made March 1,2016,for a six-month insurance policy. (c)The equipment,purchased March 1,2016,has an estimated useful life of 5 years with no salvage value.The firm uses the straight-line method of depreciation.

The partial worksheet for the Marion Consulting Services for the month ended January 31,2016,is shown below.Using this data,prepare an income statement,a statement of owner's equity,and a balance sheet.The owner made no additional investments during the month.

Which of the following statements is not correct?

If an adjustment is not recorded for supplies used,the firm's assets will be overstated.

If adjustments are entered on a worksheet,it is not necessary to record them in the journal or the ledger.

The adjusting entry to account for the expiration of prepaid insurance consists of

For each of the accounts listed below,enter the words,Increase or Decrease,in the Debit and Credit columns to indicate the effects of each on the account balance.

The balance in the Prepaid Rent account before adjustment at the end of the year is $12,000,which represents six months rent paid on November 1.The adjusting entry required on December 31 to show the amount of rent that had expired is:

On December 31,Treats Catering Inc.'s trial balance shows a $1,000 balance in the Supplies account.However,a physical count of the supplies determined that only $400 of supplies actually remain in the supply cabinet.Select the adjusting entry made on December 31,to record the amount of supplies that had been used during the year.

A total of $4,000 in supplies was purchased during the year.By the end of the year,the company had used up $1,300 of the supplies.The adjusting entry needed at the end of the year is:

Which of the following entries records the depreciation on equipment for the fiscal year-end adjustment?

When a trial balance is in balance,

In the Adjusted Trial Balance section of the worksheet the total debits should equal the total credits.