Corporate Financial Accounting
14th Edition
ISBN: 9781305653535
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 4, Problem 4.2APR
Financial statements and closing entries
Foxy Investigative Services is an investigative services firm that is owned and operated by Shirley Vickers. On November 30, 2018, the end of the fiscal year, the accountant for Foxy Investigative Services pre pared an end-of-period spreadsheet, a part of which follows:
| A | F | G | ||
| 1 | Foxy Investigative Services | |||
| 2 | End-of-Period Spreadsheet | |||
| 3 | For the Year Ended November 30, 2018 | |||
| 4 | Adjusted |
|||
| 6 | Account Title | Dr. | Cr. | |
| 7 | ||||
| 8 | Cash | 27,500 | ||
| 9 | 71,800 | |||
| 10 | Supplies | 3,550 | ||
| 11 | Prepaid Insurance | 750 | ||
| 12 | Building | 330,500 | ||
| 13 | Accumulated Depreciation—Building | I // |
184,100 | |
| 14 | Accounts Payable | 16,100 | ||
| 15 | Salaries Payable | 6,600 | ||
| 16 | Unearned Rent | 1,500 | ||
| 17 | Common Stock | 40,000 | ||
| 18 | 70,300 | |||
| 19 | Dividends | 30,000 | ||
| 20 | Service Fees | 675,500 | ||
| 21 | Rent Revenue | 9,000 | ||
| 22 | Salaries Expense | 435,000 | ||
| 23 | Rent Expense | 55,000 | ||
| 24 | Supplies Expense | 11,850 | ||
| 25 | Depreciation Expense— Building | 10,000 | ||
| 26 | Utilities Expense | 8,800 | ||
| 27 | Repairs Expense | 4,250 | ||
| 28 | Insurance Expense | 3,000 | ||
| 29 | Miscellaneous Expense | 11,100 | ||
| 30 | 1,003,100 | 1,003,100 | ||
Instructions
- 1. Prepare an income statement, a retained earnings statement, and a
balance sheet . - 2.
Journalize the entries that were required to close the accounts at November 30. - 3. If Retained Earnings had instead decreased $46,000 after the closing entries were posted, and the dividends remained the same, what would have been the amount of net income or net loss?
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Correction of Balance Sheet
You may use the attached spreadsheet to help you complete this activity, but you are not required to do so. You will find the spreadsheet by clicking on the green Excel icon in the upper left hand corner of the activity.
On December 31, 2019, Stevens Company's bookkeeper prepared the following balance sheet with items erroneously classified.
Stevens Company Balance SheetFor Year Ended December 31, 2019
Current Assets:
Current Liabilities:
Inventory
$ 6,000
Accounts payable
$ 9,900
Accounts receivable
5,900
Allowance for doubtful accounts
800
Cash
2,300
Salaries payable
1,500
Treasury stock (at cost)
3,300
Taxes payable
2,500
Long-Term Investments:
Long-Term Liabilities:
Temporary investments in marketable securities
3,200
Bonds payable (due 2023)
11,000
Investment in held-to-maturity bonds
10,000
Unearned rent (for 3 months)
900
Property, Plant, and Equipment:
Shareholders'…
Follow-up for Q1 Submission
The schedule of accounts receivable by age, shown below, was prepared for the Lucero Company at the end of the firm's fiscal year
on December 31, 20X1:
LUCERO COMPANY
Schedule of Accounts Receivable by Age
December 31, 20X1
Past Due-Days
31-60
Account
1-30
Balance
660.00 $
Current
Over 60
Adson, Paul
Allen, Alfred
Ash, John
$
620.00
326.00
350.00
106.00
351.00
78.00
47,009.00
660.00
$ 510.00 $ 110.00
$ 326.00
Вае, John
Barker, Kelsie
Bentley, Maggie
Blair, Herman
(All other accts.)
350.00
75.00
125.00
31.00
155.00
71.00
55.00
23.00
38,790 5,304.00 1,764.00 1,151.00
Totals
$49,500.00 $40,000.00 $6,000.00 $2,000.00 $1,500.00
2. As of December 31, 20X1, there is a credit balance of $118 in Allowance for Doubtful Accounts. Compute the amount of the
adjustment for uncollectible accounts expense that must be made as part of the adjusting entries.
3. Prepare a journal entry to record the adjustment for the estimated losses. Use Uncollectible Accounts Expense and…
Financial Statements and Closing Entries
The Gorman Group is a financial planning services firm owned and operated by Nicole Gorman. As of October 31, 2018, the end of the fiscal year, the accountant for The Gorman Group prepared an end-of-period spreadsheet, part of which follows:
The Gorman GroupEnd-of-Period SpreadsheetFor the Year Ended October 31, 2018
Adjusted Trial Balance
Account Title
Dr.
Cr.
Cash
$13,350
Accounts Receivable
29,060
Supplies
4,540
Prepaid Insurance
9,810
Land
103,000
Buildings
371,000
Accumulated Depreciation-Buildings
120,900
Equipment
268,000
Accumulated Depreciation-Equipment
157,500
Accounts Payable
34,370
Salaries Payable
3,410
Unearned Rent
1,540
Common Stock
154,000
Retained Earnings
286,340
Dividends
25,800
Service Fees
490,090
Rent Revenue
5,180
Salaries Expense
351,350
Depreciation Expense-Equipment
19,100
Rent Expense
16,000
Supplies Expense
11,300…
Chapter 4 Solutions
Corporate Financial Accounting
Ch. 4 - Prob. 1DQCh. 4 - Describe the nature of the assets that compose the...Ch. 4 - Prob. 3DQCh. 4 - Prob. 4DQCh. 4 - Why are closing entries required at the end of an...Ch. 4 - Prob. 6DQCh. 4 - What is the purpose of the post-closing trial...Ch. 4 - Prob. 8DQCh. 4 - What is the natural business year?Ch. 4 - Recent fiscal years for several well-known...
Ch. 4 - Flow of accounts into financial statements The...Ch. 4 - Retained earnings statement Blake Knudson owns and...Ch. 4 - Classified balance sheet The following accounts...Ch. 4 - Prob. 4.4BECh. 4 - Accounting cycle From the following list of steps...Ch. 4 - Flow of accounts into financial statements The...Ch. 4 - Classifying accounts Balances for each of the...Ch. 4 - Financial statements from the end-of-period...Ch. 4 - Financial statements from the end-of-period...Ch. 4 - Income statement The following account balances...Ch. 4 - Income statement; net loss The following revenue...Ch. 4 - Income statement FedEx Corporation had the...Ch. 4 - Retained earnings statement Climate Control...Ch. 4 - Retained earnings statement; net loss Selected...Ch. 4 - Classifying assets Identify each of the following...Ch. 4 - Balance sheet classification At the balance sheet...Ch. 4 - Balance sheet Dynamic Weight Loss Co. offers...Ch. 4 - Prob. 4.13EXCh. 4 - Identifying accounts to be closed From the list...Ch. 4 - Closing entries Prior to its closing, Income...Ch. 4 - Closing entries with net income After all revenue...Ch. 4 - Closing entries with net loss Rainbow Services Co....Ch. 4 - Identifying permanent accounts Which of the...Ch. 4 - Post-closing trial balance An accountant prepared...Ch. 4 - Steps in the accounting cycle Rearrange the...Ch. 4 - Appendix 1 Completing an end-of-period spreadsheet...Ch. 4 - Prob. 4.22EXCh. 4 - Appendix 1 Completing an end-of-period spreadsheet...Ch. 4 - Prob. 4.24EXCh. 4 - Prob. 4.25EXCh. 4 - Prob. 4.26EXCh. 4 - Appendix 2 Reversing entry The following adjusting...Ch. 4 - Appendix 2 Adjusting and reversing entries On the...Ch. 4 - Appendix 2 Adjusting and reversing entries On the...Ch. 4 - Appendix 2 Entries posted to wages expense account...Ch. 4 - Appendix 2 Entries posted to wages expense account...Ch. 4 - Financial statements and closing entries Lamp...Ch. 4 - Financial statements and closing entries Foxy...Ch. 4 - T accounts, adjusting entries, financial...Ch. 4 - Ledger accounts, adjusting entries, financial...Ch. 4 - Complete accounting cycle For the past several...Ch. 4 - Financial statements and closing entries Last...Ch. 4 - Financial statements and closing entries The...Ch. 4 - Prob. 4.3BPRCh. 4 - Ledger accounts, adjusting entries, financial...Ch. 4 - Complete accounting cycle For the past several...Ch. 4 - The unadjusted trial balance of PS Music as of...Ch. 4 - Kelly Pitney began her consulting business, Kelly...Ch. 4 - Continuing Company Analysis- Amazon: Working...Ch. 4 - Under Armour: Current ratio The following year-end...Ch. 4 - Prob. 4.3ADMCh. 4 - Google and Microsoft: Current ratio Google, Inc....Ch. 4 - Prob. 4.1TIFCh. 4 - Communication Your friend, Daniel Nat, recently...
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