ACCT 201 ch 3 homework

Place the steps in the four-step closing process in the correct order:

1: close revenue accounts 2: close expense accounts 3: close income summary account 4: close dividends account

Carlin Company has current assets of $100,000, total assets of $1,000,000, current liabilities of $50,000, total liabilities of $250,000 and total equity of $750,000. What is the current ratio (rounded to the nearest decimal point)?

2.0 steps: 1: $100,000 / $50,000 = 2

Roselawn Company reported net sales of $90,000 and net income of $18,000 for the previous year ended December 31. The company reported net sales of $100,000 and net income of $20,000 for the current year ended December 31. Total assets amounted to $200,000 at December 31 of the previous year and $246,000 at December 31 of the current year. The company's profit margin for the current year ended December 31 (rounded to the nearest decimal point) is:

20.0%. steps: 1: net income / net sales 2: $20,000 / $100,000 = .2 (100) = 20.0%

An unclassified balance sheet:

Broadly groups assets, liabilities and equity

Post-Closing trial balance

Includes assets, liabilities, common stock and ending retained earnings cash, supplies, prepaid insurance, equipment, accumulated depreciation, common stock, and retained earnings

The revenue recognition principle requires that revenue be recorded:

When the goods or services are provided to customers.

On Saturday, December 31, the company's owner provided ten hours of service to a customer. The company bills $100 per hour for services provided on weekends. Payment has not yet been received. The owner did not stop in the office on Saturday; as such, on December 31, the services were unbilled and unrecorded. Complete the necessary December 31 journal entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

accounts receivable: $1,000 debit services revenue: $1,000 credit

The following is a partial list of account names that appear on the company's adjusted trial balance. Classify the following list of accounts into the correct financial statement column using the drop-down list.

accounts receivable: asset unearned revenue: liability accounts receivable: liability

An adjusted trial balance includes which of the following accounts:

all accounts and their balances

prepaid expenses reflect transaction when cash is paid:

before the related expense is recognized

Identify the accounts that would appear on the post-closing trial balance.

cash: included dividends: not included depreciation expense: not included retained earnings: included Income summary: not included

The following is a partial list of account names that appear on the company's adjusted trial balance. Classify the following accounts into the correct financial statement column using the drop-down list.

consulting revenue: revenue rent expense: expense dividend: dividends

Interim financial statements:

cover less than one year, usually spanning one-, three-, or six-month periods.

Assume that the Accumulated Depreciation account has an unadjusted normal balance of $120,000. The company's list of adjusting entries includes one that debits Depreciation Expense and credits the Accumulated Depreciation account for $20,000. The adjusted balance in the Accumulated Depreciation account is a:

credit balance of $140,000 steps: 1: $120,000 + $20,000 = $140,000

The current ratio is computed as:

current assets divided by current liabilities

On January 1, the company purchased equipment that cost $10,000. The equipment is expected to be worth about (or has a salvage value of) $1,000 at the end of its useful life in five years. The company uses straight-line depreciation. It has not recorded any adjustments relating to this equipment during the current year. Complete the necessary December 31 journal entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

depreciation expense: debit $1,800 accumulated depreciation: credit $1,800

The company's adjusted trial balance as follows includes the following accounts balances: Cash, $15,000; Equipment, $85,000; Accumulated Depreciation, $25,000; Accounts Payable, $10,000; Retained earnings, $59,000; Dividends, $2,000; Fees Earned, $56,000; Depreciation Expense, $25,000; and Salaries Expense, $23,000. All accounts have normal balances. Prepare the first closing entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

fees earned: $56,000 debit income summary: $56,000 credit

The company's adjusted trial balance as follows includes the following accounts balances: Cash, $15,000; Equipment, $85,000; Accumulated Depreciation, $25,000; Accounts Payable, $10,000; Retained earnings, $59,000; Dividends, $2,000; Fees Earned, $56,000; Depreciation Expense, $25,000; and Salaries Expense, $23,000. All accounts have normal balances. Prepare the third closing entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

income summary: $8,000 debit retained earnings: $8,000 credit

If a company's net income increased while its net sales remained constant, the company's profit margin would:

increase

adjusting entries affect:

one or more balance sheet accounts and one or more income statement accounts

The company employs a single employee who works all five weekdays and is paid on the following Monday. The employee works the entire week ending on Friday, December 30. The employee earns $800 per day. Complete the necessary December 31 journal entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

salaries expense: $4,000 debit salaries payable: $4,000

The accounting cycle consists of 10 steps. Identify the order in which the first five steps will be performed by selecting from the drop down items.

step 1: analyze transactions step 2: journalize step 3: post step 4: prepare unadjusted trial balance step 5: adjust accounts

Before the adjusting entry for a deferral of an expense, the expenses will be _____ and the assets will be _____.

understated, overstated

On November 1, the company rented space to another tenant. A check in the amount of $9,000, representing three months' rent in advance, was received from the tenant on that date. The payment was recorded with a credit to the Unearned Rent Revenue account. Complete the necessary December 31 adjusting journal entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

unearned rent revenue: $6,000 debit rent revenue: $6,000 credit