Exam 4: Completing the Accounting Cycle

The following items are taken from the financial statements of the Freight Service for the year ending December 31 2016: Accounts payable 19,000 Accounts receivable 13,000 Accumulated depreciation - equipment 26,000 Advertising expense 21,200 Cash 15,000 Owner's capital (1/1/16) 104,000 Owner's drawings 11,000 Depreciation expense 12,000 Insurance expense 3,800 Note payable, due 6/30/17 72,000 Prepaid insurance (12-month policy) 7,200 Rent expense 16,000 Salaries and wages expense 32,000 Service revenue 135,000 Supplies 5,000 Supplies expense 6,000 Equipment 210,000 What is the company's net income for the year ending December 31 2016?

A company's liquidity is concerned with the relationship between long-term investments and long-term debt.

The following items are taken from the financial statements of the Freight Service for the year ending December 31 2016: Accounts payable 19,000 Accounts receivable 13,000 Accumulated depreciation - equipment 26,000 Advertising expense 21,200 Cash 15,000 Owner's capital (1/1/16) 104,000 Owner's drawings 11,000 Depreciation expense 12,000 Insurance expense 3,800 Note payable, due 6/30/17 72,000 Prepaid insurance (12-month policy) 7,200 Rent expense 16,000 Salaries and wages expense 32,000 Service revenue 135,000 Supplies 5,000 Supplies expense 6,000 Equipment 210,000 What are total current assets at December 31 2016?

Current liabilities

Eastwood Post Pavillion received a $650 check from a customer for the balance due. The transaction was erroneously recorded as a debit to Cash $560 and a credit to Service Revenue $560. The correcting entry is

Under IFRS

The Owner's Drawings account is closed to the ______________ account at the end of the accounting period.

The worksheet does not show

The income statement for the month of June 2016 of Snap Shot Inc. contains the following information: Revenues \7 ,300 Expenses: Salaries and Wages Expense \ 3,000 Rent Expense 1,300 Advertising Expense 700 Supplies Expense 200 Insurance Expense 100 Total expenses 5,300 Net income \2 ,000 The entry to close Income Summary to Owner's Capital includes

The income statement for the month of June 2016 of Snap Shot Inc. contains the following information: Revenues \7 ,300 Expenses: Salaries and Wages Expense \ 3,000 Rent Expense 1,300 Advertising Expense 700 Supplies Expense 200 Insurance Expense 100 Total expenses 5,300 Net income \2 ,000 At June 1 2016 Snap Shot reported owner's equity of $36000. The company had no owner drawings during June. At June 30 2016 the company will report owner's equity of

Use the following income statement for the year 2016 for Belle Company to prepare entries to close the revenue and expense accounts for the company. Service revenue \ 85,000 Expenses: Salaries and Wages Expense \ 40,000 Rent Expense 12,500 Advertising Expense Total expenses Net income (loss)

The most efficient way to accomplish closing entries is to

The following information is for Central Avenue Real Estate: Central Avenue Real Estate Balance Sheet December 31, 2016 Cash \ 25,000 Prepaid Insurance 40,000 Accounts Receivable 50,000 Inventory 80,000 Land Held for Investme 75,000 Land 120,000 Building \ 110,000 Less Accumulated Depreciation (20,000) 90,000 Trademark 70,000 Total Assets \5 50,000 Accounts Payable \ 60,000 Salaries and Wages Payable 25,000 Mortgage Payable 85,000 Total Liabilities 170,000 Owner's Capital 380,000 Total Liabilities and Owner's Equity \ 550,0000 The total dollar amount of assets to be classified as investments is

Give the definition of current assets and current liabilities and provide two examples of each.

The worksheet for Montoya Company has been completed through the adjusted trial balance. You are ready to extend each amount to the appropriate financial statement column. Indicate for each account the financial statement column to which the account should be extended by placing a check mark ( $\surd$ ) in the appropriate column.

The following information is for Central Avenue Real Estate: Central Avenue Real Estate Balance Sheet December 31, 2016 Cash \ 25,000 Prepaid Insurance 40,000 Accounts Receivable 50,000 Inventory 80,000 Land Held for Investme 75,000 Land 120,000 Building \ 110,000 Less Accumulated Depreciation (20,000) 90,000 Trademark 70,000 Total Assets \5 50,000 Accounts Payable \ 60,000 Salaries and Wages Payable 25,000 Mortgage Payable 85,000 Total Liabilities 170,000 Owner's Capital 380,000 Total Liabilities and Owner's Equity \ 550,0000 The total dollar amount of assets to be classified as property plant and equipment is

What is the term used to describe the owner's equity section of a corporation? (b) Identify the two owners' equity accounts in a corporation and indicate the purpose of each.

A company's operating cycle and fiscal year are usually the same length of time.

The adjusted trial balance columns of a worksheet are obtained by subtracting the adjustment columns from the trial balance columns.

It is not necessary to prepare formal financial statements if a worksheet has been prepared because financial position and net income are shown on the worksheet.