Exam 3: Adjusting and Closing Entries

Record the following entries for March 31. Explanations are not required. a. The balance of the prepaid rent account is $1,200 of the original $3,000. b. The balance of the unearned revenue account is $5,000 of the original $7,500. c. Depreciation on machinery is 15% of the depreciable cost of $10,000.

The adjusted trial balance is the basis for the preparation of the __________.

The adjusted trial balance for the land account:

Land must be adjusted for depreciation at the end of the period.

Revenues are:

Income taxes payable would be an example of a(n) __________.

Adjusting entries are made only for accrued revenues and accrued expenses.

The adjusted trial balance shows:

A machine with a salvage value of $4,000 and a cost of $36,000 was purchased on January 1, 2012. What is the depreciation expense for 2012 if the company uses straight-line depreciation for 10 years?

Journalize the following entries for December 31. Explanations are not required. a. Income tax incurred but not yet paid for $1,346. b. Supplies used for $568. c. Earned subscription revenue of $800 out of $1,000 of unearned revenue.

Use the data below from the adjusted trial balance for Miller's Express Cleaning to prepare an income statement, statement of retained earnings, and a statement of change in financial position for the year ended December 31, 2013. 2,026 Cash 7,530 Accounts Payable 4,000 Retained Earnings Jan 1 153 Utilities Expense 1,200 Advertising Expense 15,290 Equipment (Net) Includes 5,000 in Amortization 13,835 Service Revenue 2,000 Common Shares 1,750 Dividends 1,216 Prepaid Insurance 4,080 Accounts Receivable 1,650 Wages Expense

A machine costing $45,000 has a life of 12 years. The salvage value is $10,000. It was purchased on February 1. Calculate the depreciation expense for the year.

The account to which dividends are closed is called __________.

The balance in the depreciation expense account on the adjusted trial balance:

It is necessary to post:

Expense accounts are closed by crediting them and debiting retained earnings.

Part of accrual accounting depends upon recording __________ entries at the end of the fiscal year.

The unadjusted trial balance for wages expense is $750. Accrued wages for the period are $1,045. The adjusted trial balance for wages expense is now a __________.

Recording office supplies as an asset after paying for them would be considered a deferral.

Closing entries are prepared for which of the following reasons?