Exam 4: Adjusting Entries and the Work Sheet

Newkirk Company began operations on January 1. The trial balance as of December 31 is presented below. Data for the adjustments are as follows: a.The office equipment has a life of five years with an estimated trade-in value of $600 at the end of five years. b.Weekly wages amount to $180 for a five-day week. As of December 31, three days' wages have accrued. c.Prepaid Insurance represents a twelve-month policy beginning March 1 of the year. d.Supplies used during December, $215. Instructions: Record the adjusting entries for Newkirk Company in general journal form.

The adjusting entry to record depreciation of equipment is

Which of the following accounts is not adjusted?

Net income for Susan's Treasures is $25,000 for the current year. The owner withdrew $3,000 per month for personal living expenses. The owner's Capital account will show a net

Assuming a normal balance, which of the following is correct concerning the balance sheet columns of the work sheet?

If total credits exceed total debits in the Balance Sheet columns of a work sheet,

Squirrel Co. purchases equipment with a cost of $20,000 and a trade-in value of $2,000. Squirrel Co. estimates that the equipment will have a useful life of 5 years. Assuming Squirrel Co. records depreciation for the entire year, the adjusting entry would be recorded as

The owner's Capital account is shown in the Income Statement Credit column on a work sheet.

Which of the following refers to the cost of an asset minus its accumulated depreciation?

If the cost of a piece of equipment is $15,000 and accumulated depreciation amounts to $5,000, the book value of the equipment is:

As equipment is depreciated, its book value increases and its accumulated depreciation increases.

The maximum period covered by a work sheet is six months.

Assume that Gatesville Co. pays its employees $1,200 per day and that pay day falls on Friday. Gatesville Co. employees work Monday through Friday. Assume the last day of the fiscal period falls on Tuesday. Gatesville Co. would record an adjusting entry for the wages worked as follows:

Jackson Co. purchases equipment with a cost of $26,000 and a trade-in value of $2,000. Jackson Co. estimates that the equipment will have a useful life of 5 years. Assuming Jackson Co. records depreciation for six months using the straight-line method, the adjustment would be recorded in the work sheet as a:

The $4,500 balance in Prepaid Insurance represents the premium paid in advance for a three-month liability insurance policy. Assuming that 2 months of premium has now expired, the adjustment would be recorded in the work sheet as a:

If a company has more than one revenue account, the company should

Accumulated depreciation appears on the income statement.

Miller Co. has a net loss for the year, the net loss would be recorded

The adjusting entry to record the amount of prepaid insurance used or expired would involve a

Match the terms below with the correct definitions. -Amount of unpaid wages owed to employees for wages earned between the last pay period end and the end of the fiscal period