Course: Financial Accounting

Flow of Accounts into Financial Statements The balances for the accounts that follow appear in the Adjusted Trial Balance columns of the end-of-period spreadsheet. Indicate whether each account would flow into the income statement, statement of stockholders' equity, or balance sheet. 1. Accumulated Depreciation-Building Balance sheet 2. Cash Balance sheet 3. Fees Earned Income statement 4. Insurance Expense Income statement 5. Prepaid Rent Balance sheet 6. Supplies Balance sheet 7. Dividends Statement of stockholders' equity 8. Wages Expense Income statement Statement of stockholders' equity Scott Lockhart owns and operates AAA Delivery Services. On January 1, 2087, Common Stock had a balance of $30,000, and Retained Earnings had a balance of $821,000. During the year, no additional common stock was issued, and $12,000 of dividends were paid. For the year ended December 31, 2017, AAA Delivery reported a net income of $65,250. Prepare a statement of stockholders' equity for the year ended December 31, 2017. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. AAA Delivery Services Statement of Stockholders' Equity For the Year Ended December 31, 2017 Common Stock Retained Earnings Total Balances, January 1, 2017 Net income Dividends Balances, December 31, 2017 Classified Balance Sheet The following accounts appear in an adjusted trial balance of Bridgewater Consulting. Indicate whether each account would be reported in the Current asset; property, plant, and equipment; Current liabilities; long-term liability; or stockholders' equity section of the December 31, 2040, balance sheet of Bridgewater Consulting. 1. Accounts Payable Current liabilities 2. Accounts Receivable Current asset 3. Accumulated Depreciation-Building Property, plant, and equipment 4. Cash Current asset 5. Common Stock Stockholders' equity 6. Note Payable (due in ten years) Long-term liability 7. Supplies Current asset 8. Wages Payable Current liabilities Closing Entries After the accounts have been adjusted at July 31, the end of the fiscal year, the following balances were taken from the ledger of Cabriolet Services Co.: Retained Earnings $312,240 Dividends 40,000 Fees Earned 443,765 Wages Expense 281,300 Rent Expense 67,500 Supplies Expense 25,315 Miscellaneous Expense 8,440 Journalize the two entries required to close the accounts. If an amount box does not require an entry, leave it blank. Nov. 30 Fees Earned Wages Expense Rent Expense llllll 111111 Supplies Expense Miscellaneous Expense Retained Earnings Nov. 30 Retained Earnings Dividends 1. Accounting Cycle From the following list of steps in the accounting cycle, identify what two steps are missing: a. Transactions are analyzed and recorded in the journal. b. Transactions are posted to the ledger. c. An unadjusted trial balance is prepared. d. An optional end-of-period spreadsheet is prepared. e. Adjusting entries are journalized and posted to the ledger. f. An adjusted trial balance is prepared. g. Financial statements are prepared. h. A post-closing trial balance is prepared. Select the steps in the accounting cycle in their proper order and include the two missing steps. Transactions are analyzed and recorded in the journal. Transactions are posted to the ledger. An unadjusted trial balance is prepared. Adjustment data are assembled and analyzed. An optional end-of-period spreadsheet is prepared. Adjusting entries are journalized and posted to the ledger. An adjusted trial balance is prepared. Financial statements are prepared. Closing entries are journalized and posted to the ledger. 10. A post-closing trial balance is prepared. 2. 3. 4. 5. 6. 7. 8. 9. Working capital and current ratio Current assets and current liabilities for Brimstone Company follow: 2014 2013 Current assets $1,485,000 $1,050,000 Current liabilities 675,000 500,000 a. Determine the working capital and current ratio for 2014 and 20Y3. Round Current ratio to 2 decimal places. 2014 2013 Working capital Current ratio b. Does the change in the current ratio from 2013 to 2044 indicate a favorable or an unfavorable change