1)

a. One-third of the work related to $15,000 cash received in advance is performed this period. b. Wages of $11,000 are earned by workers but not paid as of December 31, 2013. c. Depreciation on the companys equipment for 2013 is $10,720. d. The Office Supplies account had a $400 debit balance on December 31, 2012. During 2013, $4,623 of office supplies are purchased. A physical count of supplies at December 31, 2013, shows $512 of supplies available. e. The Prepaid Insurance account had a $5,000 balance on December 31, 2012. An analysis of insurance policies shows that $2,900 of unexpired insurance benefits remain at December 31, 2013. f. The company has earned (but not recorded) $800 of interest from investments in CDs for the year ended December 31, 2013. The interest revenue will be received on January 10, 2014. g. The company has a bank loan and has incurred (but not recorded) interest expense of $4,000 for the year ended December 31, 2013. The company must pay the interest on January 2, 2014. For each of the above separate cases, prepare adjusting entries required of financial statements for the year ended (date of) December 31, 2013. (Assume that prepaid expenses are initially recorded in asset accounts and that fees collected in advance of work are initially recorded as liabilities.)

2)

Pablo Management has eight part-time employees, each of whom earns $155 per day. They are normally paid on Fridays for work completed Monday through Friday of the same week. They were paid in full on Friday, December 28, 2013. The next week, the eight employees worked only four days because New Years Day was an unpaid holiday.

a.

Prepare the adjusting entry that would be recorded on Monday, December 31, 2013.

b.

Prepare the journal entry that would be made to record payment of the employees wages on Friday, January 4, 2014.

3)

The following is the adjusted trial balance of Wilson Trucking Company.

Account Title	Debit		Credit
Cash	$	8,900
Accounts receivable		17,500
Office supplies		3,000
Trucks		192,000
Accumulated depreciationTrucks			$	39,552
Land		85,000
Accounts payable				12,900
Interest payable				4,000
Long-term notes payable				53,000
Common Stock				33,000
Retained earnings				160,779
Dividends		20,000
Trucking fees earned				124,000
Depreciation expenseTrucks		25,511
Salaries expense		58,156
Office supplies expense		6,500
Repairs expenseTrucks		10,664
Totals	$	427,231	$	427,231

Retained Earnings is $160,779 at December 31, 2012.

a.

Prepare the income statement for the year ended December 31, 2013.

b.

Prepare the statement of retained earnings for the year ended December 31, 2013.

4)

Account Title	Debit		Credit
Cash	$	6,700
Accounts receivable		21,500
Office supplies		6,573
Trucks		197,000
Accumulated depreciationTrucks			$	40,582
Land		42,000
Accounts payable				10,700
Interest payable				11,000
Long-term notes payable				51,000
Common stock				21,000
Retained earnings				157,989
Dividends		42,000
Trucking fees earned				120,000
Depreciation expenseTrucks		26,175
Salaries expense		56,046
Office supplies expense		4,000
Repairs expenseTrucks		10,277
Totals	$	412,271	$	412,271

Use the information in the following adjusted trial balance for the Wilson Trucking Company.

Account Title	Debit			Credit
Cash	$	5,300
Accounts receivable		17,500
Office supplies		3,000
Trucks		198,000
Accumulated depreciationTrucks				$	40,788
Land		85,000
Accounts payable					9,300
Interest payable					4,000
Long-term notes payable					53,000
Common stock					37,000
Retained earnings.					164,610
Dividends		20,000
Trucking fees earned					119,000
Depreciation expenseTrucks		26,308
Salaries expense		55,811
Office supplies expense		6,545
Repairs expenseTrucks		10,234
Totals	$	427,698		$	427,698

a.	Calculate the current ratio.

Use the above adjusted trial balance to prepare Wilson Trucking Companys classified balance sheet as of December 31, 2013.

b. Compare Wilson's current ratio with the industry average. (Assume that the industry average for the current ratio is 1.5.)

Wilson's current ratio is above the industry average.
	Wilson's current ratio is below the industry average.