Exam 3: Adjusting Accounts and Preparing Financial Statements

From the adjusted trial balance,prepare an income statement for Martin Sky Taxi Services. MARTIN SKY TAXI SERVICES Adjusted Trial Balance For the year ended December 31 Cash \ 28,000 Accounts receivable 14,200 Office supplies 1,700 Airplanes 100,000 Accumulated depreciation - Airplanes 45,000 Accounts payable 11,500 Common stock 25,000 Retained earnings 46,900 Dividends 40,000 Fees earned 150,000 Rent expense 13,000 Office supplies expense 2,000 Utilities expense 2,500 Depreciation Expense - Airplanes 15,000 Salary expense 50,000 Fuel expense 12,000 Totals \ 278,400 \ 278,400

The current portion of long-term debt is classified with the _________________________.

A company's Office Supplies account shows a beginning balance of $600 and an ending balance of $400.If office supplies expense for the year is $3,100,what amount of office supplies was purchased during the period?

The adjusted trial balance of Sara's Web Services follows: SARA'S WEB SERVICES Adjusted Trial Balance December 31 Cash \ 1,170 Supplies 1,930 Prepaid insurance 600 Computer equipment 20,600 Accumulated depreciation - Computer equipment \ 5,400 Accounts payable 325 Common stock 3,000 Retained earnings 10,925 Dividends 4,800 Services revenue 21,720 Salaries expense 6,920 Depreciation expense 2,000 Rent expense 1,200 Supplies expense 800 Utilities expense 950 Insurance expense 400 Totals \ 41,370 \ 41,370 a.Prepare the closing entries for Sara's Web Services. b.What is the balance of the retained earnings account after the closing entries are posted?

The following information is available for the Wooden Company: 2013 2012 2011 Net income \ 2,630 \ 2,100 \ 1,850 Net sales 36,500 32,850 31,200 Total assets 400,000 385,000 350,000 From the information provided,calculate Wooden's profit margin ratio for each of the three years.Comment on the results,assuming that the industry average for the profit margin ratio is 6% for each of the three years.

The time period assumption presumes that an organization's activities can be divided into specific time periods.

Prior to recording adjusting entries at the end of an accounting period,some accounts may not show proper financial statement amounts even though all transactions were correctly recorded.

On January 1,Acme College received $1,200,000 in Unearned Tuition Revenue from its students for the spring semester,which spans four months beginning on January 2.What amount of tuition revenue should the college recognize on January 31?

Based on the adjusted trial balance shown below,prepare a classified balance sheet for Focus Package Delivery. * $2,000 of the long-term note payable is due during the next year.

Describe the types of entries required in later periods that result from accruals.

Prior to recording adjusting entries,the Office Supplies account had a $359 debit balance.A physical count of the supplies showed $105 of unused supplies available.The required adjusting entry is:

The system of preparing financial statements based on recognizing revenues when the cash is received and reporting expenses when the cash is paid is called:

The accrual basis of accounting:

On December 14 Bench Company received $3,700 cash for consulting services that will be performed in January.Bench records all such prepayments in a liability account.Prepare a general journal entry to record the $3,700 cash receipt.

A company recorded two days of accrued salaries of $1,400 for its employees on January 31.On February 9,it paid its employees for these accrued salaries and for other salaries earned through February 9.The January 31 and February 9 journal entries are:

A post-closing trial balance includes:

On June 30,2014,Apricot Co.paid $5,000 cash for management services to be performed over a two-year period.Apricot follows a policy of recording all prepaid expenses in asset accounts at the time of cash payment. On June 30,2014 Apricot should record:

Intangible assets are long-term resources used to produce or sell products and services; they generally lack ______________ and their benefits are highly ____________.

Plant assets and intangible assets are usually long-term assets that are used to produce or sell products and services.

Which of the following statements is incorrect?