Exam 4: Completion of the Accounting Cycle

The adjusted trial balance for DVD Concepts at December 31, 2014, is as follows: Instructions a. Calculate the balance of J. Yan, Capital that would appear on a balance sheet at December 31, 2014. b. Prepare a classified balance sheet for DVD Concepts at December 31, 2014 assuming the note payable is payable on November 30, 2016. c. Calculate working capital and the current and acid-test ratios for DVD Concepts.

A list of financial statement items for Luxmann Company at November 30, 2014 includes the following: Instructions Prepare the current assets section of the balance sheet listing the items in the sequence traditionally followed by Canadian companies.

The unadjusted trial balance of Jackson's Web Services at December 31, 2014 follows below. Additional data regarding the accounts: 1. Actual supplies on hand are $750. 2. Depreciation expense for 2014 has not yet been recorded, but has been calculated as $1,600. 3. Amounts recorded as Unearned Revenue are for services that were provided in December. No additional work needs to be done for these customers. 4. Salaries expense of $1,000 for the last week of December has not been paid yet, and should be recorded as an Account Payable. Instructions a. Complete the worksheet for the month of December, 2014. b. Calculate Profit for the year. c. Calculate the balance in E. Jackson, Capital at December 31, 2014 after closing entries are made.

The current ratio is the ratio of current liabilities divided by current assets.

Listed below are some of the steps required to complete the accounting cycle. 1. Analyze business transactions. 2. ___________________________ 3. Post to general ledger accounts. 4. Prepare a trial balance. 5. ___________________________ 6. ___________________________ 7. ___________________________ 8. Journalize and post closing entries. 9. ___________________________ Instructions Fill in the blank with the appropriate step in the accounting cycle.

The following errors were made in April 2014 by the accountant for Amanda's Cleaning Services: 1. Equipment purchased for $4,600 was entered as a debit to Cash and a credit to Accumulated Depreciation-Equipment. 2. A payment was made to the telephone company for $195. It was a payment for the March telephone bill that had been recorded as Telephone Expense in March. The accountant recorded the April payment as a debit to Telephone Expense and a credit to Cash. 3. A customer paid a deposit for work that is to be completed in May 2014 in the amount of $500. The accountant recorded the deposit as a debit to cash and a credit to Service Revenue. 4. Bank service charges were recorded as Debit Cash and Credit Bank Charges Expense for $52. Instructions Prepare the correcting entries for these errors at April 30, 2014.

Which of the following is an example of a temporary account that will be closed to Income Summary at the end of the accounting period?

Below is an adjusted trial balance. Instructions Prepare a post-closing trial balance.

Office Equipment is classified in the balance sheet as

When preparing the December 31 year-end financial statements for Style Design, the following errors were discovered: 1. On January 1, equipment was purchased for $10,000 which was expected to have a useful life of 4 years. The accountant recorded depreciation expense (in the correct accounts) as $250. 2. A bank loan of $9,000 was taken on December 1, and the funds were deposited directly to Style's bank account. The accountant recorded the deposit as a debit to Cash and a credit to Revenue. The loan is at 6% and no interest has yet been paid or recorded. 3. A customer payment in the amount of $450 was credited to Accounts Receivable and debited to Cash in the amount of $540. 4. Salaries expenses of $2,200 were recorded as a credit to Cash and a debit to Telephone Expense. 5. A payment of $3,500 made to a supplier on account was debited to Supplies instead of to Accounts Payable. This error was discovered before Supplies expense was adjusted to year-end actual balance. Instructions a. For each of the errors, indicate the effect of the error on the balance sheet and income statement, indicating whether the assets, liabilities, owner's equity, revenue, expenses, and profit are overstated (O), understated (U), or not affected (NA). Use the table below for your answer. b. For each of the errors, prepare the correcting entries required at December 31.

Crimmins Boats paid a $350 cheque to a supplier for the balance due on an account payable. The transaction was erroneously recorded as a credit to cash of $530 and a debit to Repairs Expense of $530. The correcting entry is

The trial balances of Grant Company follow with the accounts arranged in alphabetic order: Instructions Analyze the data and prepare a. the adjusting entries and b. the closing entries made by Grant Company.

On a classified balance sheet of a Canadian company, current assets are customarily listed

Assuming that there is a loss for the period, which column will the loss balance be entered in?

The owner's capital account is

In preparing closing entries

Cash and office supplies are both classified as current assets.

Reversing Entries are an optional part of the accounting cycle.

Expo Company prepared the following adjusting entries at year end on December 31, 2014: In an effort to minimize errors in recording transactions, Expo Company utilizes reversing entries. Instructions Prepare reversing entries on January 1, 2015 where appropriate.

The balance in the owner's drawings account after all closing entries have been posted will be equal to