Study Guide
Name Analyzing Accounts Affected by Adjusting and Closing Entries Examining Adjusting and Closing Entries Analyzing the Accounting Cycle for a Merchandising Business Organized as a Corporation
Total
Part One—Analyzing Accounts Affected Closing Entries
Transaction
A. Accumulated Depreciation—Office Equipment
1-2. Adjusting entry for allowance for uncollectible accounts, (p. 482)
B. Accumulated Depreciation—Store Equipment
3-4. Adjusting entry for a decrease in merchandise inventory, (p. 482)
C. Allowance for Uncollectible Accounts
5-6. Adjusting entry for office supplies, (p. 483)
D. Dividends
7-8. Adjusting entry for store supplies, (p. 483)
E. Depreciation Expense— Office Equipment
9-10. Adjusting entry for prepaid insurance, (p. 484)
F. Depreciation Expense— Store Equipment
11-12. Adjusting entry for depreciation of office equipment, (p. 484)
G. Federal Income Tax Expense
13-14. Adjusting entry for depreciation of store equipment, (p. 485)
H. Federal Income Tax Payable
15-16. Adjusting entry for federal income taxes, (p. 485)
I. Income Summary
17-18. Closing entry for the sales account, (p. 488)
J. Insurance Expense
19-20. Closing entry for the purchases account, (p. 490)
K. Merchandise Inventory
21-22. Closing entry for the income summary account with a net income, (p. 491)
L. Prepaid Insurance M. Purchases
Your Score
1 8 Pts. 9 Pts. 51 Pts.
by Adjusting and
Directions: For each adjusting or closing entry described, decide which accounts are debited and credited. Print the letter identifying your choice in the proper Answers column.
Account Title
Perfect Score 24 Pts.
Accounts to Be Debited
Credited
23-24. Closing entry for dividends, (p. 491)
N. Retained Earnings O. Sales P. Supplies—Office Q. Supplies—Store R. Supplies Expense—Office S. Supplies Expense—Store T. Uncollectible Accounts Expense COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING
Chapter 16 • 421
Part Two—Examining Adjusting and Closing Entries Directions: Place a T for True or an F for False in the Answers column to show whether each of the following statements is true or false.
Answers 1. General ledger account balances are changed only by posting journal entries, (p. 481)
1.
2. Adjusting entries bring subsidiary ledger accounts up to date. (p. 481)
2.
3. Hobby Shack records the adjusting entries in the general journal on the next line following the last daily transaction, (p. 481)
3.
4. Indicating a source document is not necessary when journalizing adjusting entries, (p. 481)
4.
5. Temporary accounts are closed at the end of a fiscal period to prepare the general ledger for the next fiscal period, (p. 487)
5.
6. Closing the temporary accounts at the end of a fiscal period is an application of the accounting concept Matching Expenses with Revenue, (p. 487)
6.
7. A temporary account is closed by recording an equal amount on the side opposite the balance, (p. 487)
7.
8. The Trial Balance columns of a work sheet and an income statement contain the information needed to journalize closing entries, (p. 487)
8.
9. Permanent accounts are sometimes referred to as nominal accounts, (p. 487)
9.
10. The ending account balances of permanent accounts for one fiscal period are the beginning account balances for the next fiscal period, (p. 487)
10.
11. Contra accounts with credit balances are closed by debiting the accounts and crediting Income Summary, (p. 488)
11.
12. Expense accounts are closed by debiting the expense accounts and crediting Income Summary, (p. 489)
12.
13. The Income Summary account is closed into the Retained Earnings account, (p. 491)
13.
14. Dividends increase the earnings retained by a corporation, (p. 491)
14.
15. After the closing entry for the Dividends account is posted, the Dividends account has a zero balance, (p. 491)
15.
16. After all closing entries are posted, the income statement accounts are the only general ledger accounts that have balances, (p. 494)
16.
17. When the general ledger is ready for the next fiscal period, this is an application of the Business Entity accounting concept, (p. 494)
17.
18. The purpose of the post-closing trial balance is to prove the general ledger equality of debits and credits, (p. 496)
18.
422 • Working Papers
CENTURY 21 ACCOUNTING, 9TH EDITION
Name
Date
Class
Part Three—Analyzing the Accounting Cycle for a Merchandising Business Organized as a Corporation Directions: Write a number from 1 to 9 to the left of each step to indicate the correct sequence of all the steps in the accounting cycle, (p. 497) Answers 1.
Post journal entries to the subsidiary ledgers and the general ledger.
2.
Check source documents for accuracy, and analyze transactions into debit and credit parts.
3.
Journalize adjusting and closing entries from the work sheet.
4.
Record transactions in journals, using information on source documents.
5.
Prepare the schedules of accounts payable and accounts receivable, using information from the subsidiary ledgers.
6.
Prepare a post-closing trial balance of the general ledger.
7.
Prepare financial statements from the work sheet.
8.
Post adjusting and closing entries to the general ledger.
9.
Prepare a work sheet, including a trial balance, from the general ledger.
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING
Chapter 16 •
423
Study Skills Making a Speech You will often be responsible for making a speech or presentation while you are in school and after school as well. Many people fear speaking in front of others, but it is actually very easy if you are well prepared. Choosing Your Topic
Your topic must be of interest to your audience and one that you can cover adequately in the time available. A common error that students make is to pick a topic that is so broad that they cannot really cover the topic in a short speech. The result is that the speech may ramble and not make any real points. Another error students sometimes make is that they use only one idea. In this case, they may simply make the same point over and over. Practicing Your Talk You should always practice giving your speech before you actually make it before the group. Practicing will help you work out any rough spots, and it will make you feel much more at ease when you make the actual presentation. A good technique is to give the talk in front of a mirror. Watching yourself while speaking can be very distracting, but it will give you valuable practice in keeping on the subject and avoiding distractions. Your Appearance On the day you are to give your talk, be sure to be well rested, and be sure to dress appropriately. When you are introduced, walk directly to the platform. Stand straight without slouching or leaning on the desk or lectern. A sloppy appearance will detract from your talk. Giving Your Speech In most cases you should not read a speech. You should talk to the members of the audience, following the ideas from notes that you have made. When you begin your talk, start with a point that will gain the attention of the group. It is not necessary to try to tell a joke. If you do not get the attention of the group at the outset, however, you may have trouble maintaining their interest. Each point should be easy to understand, and you may illustrate it with examples that are clearly related and support the point. When you proceed to the next point, you should make it clear to the group that you are moving to the next item of interest. A common error is to direct your talk to only one person in the audience, particularly someone who agrees with your points. However, you are speaking to all members of the audience and you should look at all of them. After you have made your major points, you should summarize briefly. Your conclusions should be based on the material that you have presented and should be easy to follow. Your talk should end on a strong note, and you should then stop. A common error is for a speaker to repeat the conclusion several times, allowing the speech to end on a low note. Keep on Time Keep your speech to the allotted time. If you have 20 minutes, be sure that you do not take 25 minutes. Pace yourself so that you will finish all points on time. Do not go too slowly at first and then rush at the end. This can make your talk dull at the beginning and hard to follow at the end. With proper planning and practice, you will soon be making excellent talks.
424 • Working Papers
CENTURY 21 ACCOUNTING, 9TH EDITION
^ Journalizing adjusting entries
a CD
Discount Books, Inc. Work Sheet
I
For Year Ended December 31, 20 — ACCOUNT TITLE
en 3-
Cash Petty Cash o
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CD n O
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Accounts Receivable Merchandise Inventory
O (/) =3' CQ
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BALANCE SHEET DEBIT
5 14 8 25
2 0 0 00 14 1 5 8 22
2 0 0 00 2 120 (d) -|
84 8 15 20
8 4 8 25
1 5 2 1 20
86 6 6 3 45
1 6 4 8 85
4 4 8 55
2 0 0 30
3 4 8 1 12
""3 2 4 8 11
2 3 3 01
Prepaid Insurance
12 0 0 0 00
"11 0 0 0 00
10 0 0 00
Office Equipment
14 1 5 4 55
Store Equipment
00 0"
14 1 5 4 55 4 1 5 4 25
Ace. Depr. —Office Equipment
CREDIT
14 1 5 8 22 H1 50 0 00
Supplies— Office
m 3
7 5 6 4 25
4 1 0 00
42 1 5 8 15
42 15 8 15 8 4 8 0 00
(s)6
4 2 0 00
lh)3
9 4 8 91
12 4 5 8 51
Federal Income Tax Payable
14 9 0 0 00 12 4 5 8 51 3 9 4 8 91
Emp. Income Tax Pay.
4 6 5 00
4 6 5 00
Social Security Tax Payable
4 9 6 00
4 9 6 00
1 16 00
1 1 6 00
1 5 4 8 00
1 5 4 8 00
Unemployment Tax Pay. —Fed.
8 00
8 00
Unemployment Tax Pay. —State
5 4 00
5 4 00
Medicare Tax Payable
5 0 0 00
5 0 0 00
U.S. Savings Bonds Payable
5 0 00
5 0 00
United Way Donations Pay.
6 0 00
6 0 00
4 0 0 0 00
4 0 0 0 00
Health Ins. Premiums Pay.
Dividends Payable o
DEBIT
Supplies—Store
Sales Tax Payable
q
CREDIT
H j
Accounts Payable
Q
NCOME STATEMENT
ADJUSTMENTS DEBIT
CREDIT
5 1 4 8 25
Allow, for Uncoil. Accts. re Su
Ace. Depr. —Store Equipment CQ D Zl Q_
TRIAL BALANCE DEBIT
Capital Stock
24 0 0 0 00
24 0 0 0 00
Retained Earnings
34 9 4 2 87
34 9 4 2 87
a Q CD"
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Discount Books, Inc.
to
Work Sheet For Year Ended December 31, 20 - -
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T R I A L BALANCE
ADJUSTMENTS
I N C O M E STATEMENT
BALANCE SHEET
A C C O U N T TITLE DEBIT
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27
28
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DEBIT
DEBIT
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8 4 8 25
Sales Discount
31
Sales Returns and Allowances
32
Purchases
33
Purchases Discount
34
Purch. Returns and Allowances
35
Advertising Expense
6 0 0 0 00
6 0 0 0 00
36
Cash Short and Over
4 84
4 84
37
Credit Card Fee Expense
430 5 2 1 58
430 5 2 1 58
2 1 5 00
2 15 00
4 1 5 3 28
4 1 5 3 28
174 4 8 1 20
174 4 8 1 20 3 4 5 25
5 5 4 8 74
5 5 4 8 74
5 1 4 8 25
Depr. Exp. —Office Equipment
39
Depr. Exp. — Store Equipment
40
Insurance Expense
(c)ll
41
Miscellaneous Expense
4 1 5 0 00
4 1 5 0 00
42
Payroll Taxes Expense
8 7 4 5 25
8 7 4 5 25
43
Rent Expense
12 0 0 0 00
12 0 0 0 00
44
Salary Expense
97 4 5 8 84
Supplies Expense — Store Uncollectible Accounts Exp.
48
Utilities Expense
49
Fed. Income Tax Expense
31. 3
1
3 4 1 0 00 6 4 2 0 00 11 0 0 0 00
97 4 5 8 84 4 4 8 55 « 3 2 4 8 11 H
j
5 0 0 00
5 6 4 8 40
1 4 4 8 55 3 2 4 8 11 1 5 0 0 00 5 6 4 8 40
,h, 3
9 4 8 91
19 9 4 8 91
527 7 6 9 40 527 7 6 9 40 32 8 2 3 82 32 8 2 3 82 364 9 8 0 63 438 2 6 3 82 179 9 1 5 93 106 6 3 2 74
50
52
0 0 0 00
H 1
16 0 0 0 00
0
5 1 4 8 25
» 3 4 1 0 00 « 6 4 2 0 00
47
73
3 4 5 25
38
Supplies Expense— Office
CREDIT
1 8 4 8 25
Sales
46
DEBIT
16 0 0 0 00 (d)
30
45
CREDIT
16 0 0 0 00
29
51
Z
Dividends Income Summary
CREDIT
Net Income after Fed, Income Tax
73 2 8 3 19
73 2 8 3 19
438 2 6 3 82 438 2 6 3 82 179 9 1 5 93 179 9 1 5 93
Name
16-1
Date.
Class
WORK TOGETHER (concluded)
1. GENERAL JOURNAL
18
ACCOUNT TITLE
Chapter 16
Recording Adjusting and Closing Entries for a Corporation • 427
53 <
bturgis bupply, Inc.
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Cash Petty Cash
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Accounts Receivable
5
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CREDIT
DEBIT
6
I N C O M E STATEMENT
ADJUSTMENTS
7
8
Merchandise Inventory
CREDIT
H.
BALANCE SHE E T DEBIT
20 1 5 8 25
20 15 8 25
5 0 0 00
5 0 0 00
42 4 8 8 25
42 4 8 8 25 1 0 8 8 18
Allow, for Uncoil. Accts.
n o
CREDIT
315 4 1 8 25
3
2 5 0 00
(d) -,
6 4 8 22
313 7 7 0 03
/-
8 4 7 15
3 0 1 33
Supplies— Office
7 1 4 8 48
Supplies — Store
6 1 5 4 88
(b>5
5 4 8 11
6 0 6 77
18 0 0 0 00
(c)16
0 0 0 00
2 0 0 0 00
CD
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4 3 3 8 18
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TRIAL BALANCE
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Sturgis Supply, Inc. Work Sheet For Year Ended December 31,20 - T R I A L BALANCE
ADJUSTMENTS
I N C O M E STATEMENT
BALANCE SHEET
A C C O U N T TITLE DEBIT
27
n Q TJ
CD
CQ
Q O to 3' CQ
W!
27
Sales Returns and Allowances
32
Purchases
33
Purchases Discount
7 1 5 4 25
7 1 5 4 25
33
34
Purch. Returns and Allowances
6 4 4 8 94
6 4 4 8 94
34
35
Advertising Expense
15 0 0 0 00
15 0 0 0 00
35
36
Cash Short and Over
5 25
5 25
36
37
Credit Card Fee Expense
18 4 8 7 15
18 4 8 7 15
37
38
Depr. Exp. —Office Equipment
'" 8 4 5 0 00
8 4 5 0 00
38
39
Depr. Exp. —Store Equipment
181
8 6 0 0 00
39
40
Insurance Expense
8 6 0 0 00 (c)16 0 0 0 00
16 0 0 0 00
40
41
Miscellaneous Expense
9 4 8 0 00
9 4 8 0 00
41
42
Payroll Taxes Expense
18 4 8 6 69
18 4 8 6 69
42
43
Rent Expense
24 0 0 0 00
24 0 0 0 00
43
44
Salary Expense
183 0 0 0 00
44
6 8 4 7 15
45
5 5 4 8 11
46
46
Supplies Expense— Store
—l
47
Uncollectible Accounts Exp.
48
Utilities Expense
49
Fed. Income Tax Expense
50
51
4*
CREDIT
36 0 0 0 00
31
6"
to
36 0 0 0 00
DEBIT
Sales Discount
Supplies Expense — Office
o
T
30
45
n o -8 o
CRED
Sales
CD"
Q
DEBIT
29
3_ ^
CREDIT
Income Summary
Q Q_
DEBIT
28
CD"
o
Dividends
CREDIT
52
6 4 8 22
16 4 8 22
998 14 8 15
28
998 14 8 15
29
12 4 8 22
12 4 8 22
30
6 4 8 8 95 442 5 1 8 25
6 4 8 8 95
31
442 5 1 8 25
32
183 0 0 0 00 »
6
8 4 7 15 « g 5 4 8 11 w 3
9 5 8 1 25
2 5 0 00
3 2 5 0 00 9 5 8 1 25
:h)24 16 3 72 74 16 3 72 50 0 0 0 00 n 1,355 8 6 2 87 1,355 8 3 2 87 74 5 0 7 20 74 5 0 7 20 852 8 0 2 96 1,011 7 5 1 34 547 4 9 3 63 388 5 4 5 25 158 9 4 8 38 158 9 4 8 38 Net Income after Fed. Income Tax 1,011 7 5 1 34 1,011 7 5 1 34 547 4 9 3 63 547 4 9 3 63
47
48
49
50
51
52
O
16-1
ON YOUR OWN (concluded)
1. GENERAL JOURNAL
PAGE
24
ACCOUNT TITLE
430 • Working Papers
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING
Name
16-2
Date.
Class
WORK TOGETHER, p. 493
Journalizing closing entries
1. GENERAL JOURNAL
PAGE 1:7
ACCOUNT TITLE
Chapter 16
Recording Adjusting and Closing Entries for a Corporation • 431
16-2
ON YOUR OWN, p. 493
Journalizing closing entries
1. GENERAL JOURNAL
25
ACCOUNT TITLE
432 • Working Papers
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING
Name
16-3
Date.
Class
WORK TOGETHER, p. 498
Preparing a post-closing trial balance
1.
ACCOUNT TITLE
^
Chapter 1 6
Recording Adjusting and Closing Entries for a Corporation • 433
16-3
ON YOUR OWN, p. 498
l.
ACCOUNT TITLE
434 • Working Papers
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING
