Exam 5: Adjustments and the Worksheet

The unadjusted net income on the income statement was $23,760. After journalizing and posting the adjusting entries for the $1,620 of supplies used and $3,700 of depreciation on the company's equipment for the year, the adjusted net income is:

The statement of owner's equity is prepared from the data in the Balance Sheet section of the worksheet.

Read each of the following transactions for Enterprises Security Systems. Determine the accounts and amounts to be debited and credited in the necessary end-of-July adjustments. A. On July 1, 2019, Enterprises Security Systems, a new firm, bought supplies for $2,300. The $2,300 was debited to the Supplies account. An inventory of supplies at the end of July showed that supplies costing $900 were on hand. B. On July 1, 2019, the firm bought equipment costing $24,000. The equipment has an expected useful life of 10 years and no salvage value. The firm will use the straight-line method of depreciation. C. On July 1, 2019, the firm paid $4,500 rent in advance for a nine-month period. The $4,500 was debited to the Prepaid Rent account.

Read each of the following transactions for Pickerton Printer Repair Services. Determine the accounts and amounts to be debited and credited in the necessary end-of-April adjustments. A. On April 1, 2019, Pickerton Printer Repair Services, a new firm, bought supplies for $2,500. The $2,500 was debited to the Supplies account. An inventory of supplies at the end of April showed that supplies costing $1,500 were on hand. B. On April 1, 2019, the firm bought equipment costing $25,000. The equipment has an expected useful life of 10 years and a salvage value of $1,000. The firm will use the straight-line method of depreciation. C. On April 1, 2019, the firm paid $7,200 rent in advance for a six-month period. The $7,200 was debited to the Prepaid Rent account.

If a worksheet is prepared at the end of the accounting year,

If the adjustment for expired rent is not recorded, the firm's expenses will be overstated.

Which of the following statements is correct?

On the worksheet, the Balance Sheet columns should balance:

Which of the following statements is not correct?

On October 25, 2019, the company paid $24,000 rent in advance for the six-month period (November 2019 through April 2020). On December 31, 2019, the adjustment for expired rent would include:

The Supplies account had a balance of $1,200 when a physical count indicated that supplies on hand totaled $250. This means that supplies in the amount of ________ were used during the accounting period.

MacGyver Company bought equipment on January 3, 2019, for $52,000. At the time of purchase, the equipment was estimated to have a useful life of five years and a salvage value of $4,000. Using the straight-line method, the amount of one year's depreciation is:

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

Read the description of following adjustments that are required at the end of the accounting period for Paulo Consulting Services. Record the necessary adjusting entries required at the end of January on page 2 of a general journal. Omit the descriptions. A. Equipment was purchased on January 1, 2019, for $60,000 and has an estimated useful life of 7 years with a salvage value of $3,720. Depreciation is computed using the straight-line method. B. Signed a 5-month contract for $4,500 of prepaid advertising on January 1, 2019. C. Prepaid rent for the year on January 1, 2019, in the amount of $22,200. D. Purchased supplies for $3,200 on January 1, 2019. Inventory of supplies was $2,800 on January 31, 2019.

The adjustments made on the worksheet:

A total of $3,700 in supplies was purchased during the year. By the end of the year, the company had used $2,200 of the supplies. The adjusting entry needed at the end of the year is:

On a worksheet, a net loss is:

Land is a long-term asset that is not subject to depreciation.

On a worksheet, the adjusting entry to account for depreciation of equipment consists of:

Read each of the following transactions for Gallagher Enterprises. Determine the accounts and amounts to be debited and credited in the necessary end-of-January adjustments. A. On January 1, 2019, Gallagher Enterprises, a new firm, paid $4,800 rent in advance for a three-month period. The $4,800 was debited to the Prepaid Rent account. B. On January 1, 2019, the firm bought supplies for $3,000. The $3,000 was debited to the Supplies account. An inventory of supplies at the end of January showed that supplies costing $1,300 were on hand. C. On January 1, 2019, the firm bought equipment costing $15,000. The equipment has an expected useful life of 8 years and a salvage value of $1,560. The firm will use the straight-line method of depreciation.