Mgt 1302 accounting lesson 4.1
1. Explain why the following accounts are being adjusted in the followingentries:
The following accounts are being adjusted to be able to balance the accounting equation.
2. Explain what the following termsmean:
g. Unearned servicerevenue:
h. Servicerevenue: .
3. Answer the followingquestions:
a. What type of normal balance does the Retained earnings account have—debit orcredit?
b.Which Income Statement account has the same type of balance as the Retainedearnings account?
c. Which type of Income Statement account has the opposite type of balance as theRetained earningsaccount?
d.What do we call the difference between total debits and total credits on the IncomeStatement?
Into what account is the difference figure closed at the end of theperiod?
4. It is December 31 and time for you to close thebooks.
R1. Journalize the closing entries for Brett KauffmanEnterprises:
5. It is December 31 and time for your business to close the books. The followingbalances appear on the books of Cedrick OwensEnterprises.
R1. Set up each T-account given and insert its adjusted balance as given (denote as Bal)at December 31. Also set up a T-account for Retained earnings, $20,300, and for Incomesummary. R2. Post the closing entries to the accounts, denoting posted amounts asClo.
6. Lipsky Insurance Agency reported the following items at September 30,2011:
R1. Journalize Lipsky’s closing entries, as needed for theseaccounts
7. Kaminsky Insurance Agency reported the following items at June30:
R1. Prepare T-accounts for Kaminsky Insurance Agency. Insert the account balances priorto closing. Post the closing entries to these accounts, and show each account’s endingbalance after closing. Also show the Income summary T-account. Denote a balance as Bal and aclosing entry amount asClo.
8. After closing its accounts at February 28, 2010, Watts Electric Company had thefollowing accountbalances:
R1. Prepare Watts’ postclosing trial balance at February 28,2010.
9. Ink Jet Printing reported the following (amounts inthousands):
R1. Identify the assets (including contra assets) andliabilities.
R2. Classify each asset and each liability as current orlong-term.
10. Examine Ink Jet Printing’s account balances in problem#9.
R1. Identify or compute the following amounts for Ink JetPrinting:
11. Granite State Telephone and Telegram has these account balances at December31, 2011:
R1. Compute Granite State Telephone and Telegram’s current ratio and debtratio.
R2. How much in current assets does Granite State Telephone and Telegram have forevery dollar of current liabilities that itowes?
12. The trial balance of Data Link, Inc., at September 30,follows:
Additional information at September 30,2011:
R1. Complete Data Link’s work sheet for the month ended September 30,2011.
R2. How much was net income forSeptember?
13. Use your answer from problem#12.
R1. Journalize Data Link’s adjusting and closing entries at September 30,2011.
14. Consider the entries prepared in problem #13.
R1. Set up T-accounts for those accounts affected by the adjusting and closing entries inproblem
R2. Post the adjusting and closing entries to the accounts; denote adjustment amounts byAdj, closing amounts by Clo, and balances by Bal. Double underline the accounts with zerobalances after you close them, and show the ending balance in eachaccount.