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1. BE.03-01
Accounts Requiring Adjustment

Indicate with a Yes or No whether or not each of the following accounts normally requires an adjusting entry:

a. Building
b. Cash
c. Wages Expense
d. Miscellaneous Expense
e. Common Stock
f. Prepaid Insurance

2. BE.03-04

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Adjustment for accrued expense

Instructions

Prospect Realty Co. pays weekly salaries of $27,600 on Monday for a six-day workweek ending the preceding Saturday.

Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends on Friday. Refer to the Chart of Accounts for exact wording of account titles.

Chart of Accounts

CHART OF ACCOUNTS

Prospect Realty Co.

General Ledger

ASSETS REVENUE

11 Cash 41 Fees Earned

12 Accounts Receivable

13 Supplies EXPENSES

14 Prepaid Insurance 51 Advertising Expense

15 Land 52 Insurance Expense

16 Equipment 53 Rent Expense

17 Accumulated Depreciation-Equipment 54 Salaries Expense

55 Supplies Expense

LIABILITIES 56 Utilities Expense

21 Accounts Payable 57 Depreciation Expense

22 Unearned Fees 59 Miscellaneous Expense

23 Salaries Payable

24 Taxes Payable

EQUITY

31 Common Stock

32 Retained Earnings

33 Dividends

Journal

Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends on Friday, July 31. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL ACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

1   Adjusting Entries            
2  
3  

3. BE.03-06

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Adjustment for prepaid expense

Instructions

The prepaid insurance account had a beginning balance of $4,500 and was debited for $16,600 of premiums paid during the year.

Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future periods is $5,600. Refer to the Chart of Accounts for exact wording of

account titles.

Chart of Accounts

CHART OF ACCOUNTS

General Ledger

ASSETS REVENUE

11 Cash 41 Fees Earned

12 Accounts Receivable

13 Supplies EXPENSES

14 Prepaid Insurance 51 Advertising Expense

15 Land 52 Insurance Expense

16 Equipment 53 Rent Expense

17 Accumulated Depreciation-Equipment 54 Salary Expense

55 Supplies Expense

LIABILITIES 56 Utilities Expense

21 Accounts Payable 57 Depreciation Expense

22 Unearned Fees 59 Miscellaneous Expense

23 Salaries Payable

24 Taxes Payable

EQUITY

31 Common Stock

32 Retained Earnings

33 Dividends

Journal

Journalize the adjusting entry required at the end of the year (December 31), assuming the amount of unexpired insurance related to future periods is $5,600. Refer to the Chart of Accounts for

exact wording of account titles.

PAGE 10

JOURNAL ACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

1   Adjusting Entries            
2  
3  

4. BE.03-09
Effect of Errors on Adjusted Trial Balance

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For each of the following errors, considered individually, indicate whether the error would cause the adjusted trial balance totals to be unequal. If the error would cause the
adjusted trial balance totals to be unequal, indicate whether the debit or credit total is higher and by how much.

a. The adjustment for accrued wages of $5,200 was journalized as a debit to Wages Expense for $5,200 and a credit to Accounts Payable for $5,200.

Enter the difference between the debit and credit totals. If the totals are equal, enter a zero.
$

b. The entry for $1,125 of supplies used during the period was journalized as a debit to Supplies Expense of $1,125 and a credit to Supplies of $1,152.

Enter the difference between the debit and credit totals. If the totals are equal, enter a zero.
$

5. EX.03-05
Adjusting entries for accrued salaries

Instructions

Garcia Realty Co. pays weekly salaries of $17,250 on Friday for a five-day workweek ending on that day.

Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends (a) on Wednesday and (b) on Thursday. Refer to the Chart of Accounts for exact

wording of account titles.

Chart of Accounts

CHART OF ACCOUNTS

Garcia Realty Co.

General Ledger

ASSETS REVENUE

11 Cash 41 Fees Earned

12 Accounts Receivable

13 Supplies EXPENSES

14 Prepaid Insurance 51 Advertising Expense

15 Land 52 Insurance Expense

16 Equipment 53 Rent Expense

17 Accumulated Depreciation-Equipment 54 Salaries Expense

55 Supplies Expense

LIABILITIES 56 Utilities Expense

21 Accounts Payable 57 Depreciation Expense

22 Unearned Fees 59 Miscellaneous Expense

23 Salaries Payable

24 Taxes Payable

EQUITY

31 Common Stock

32 Retained Earnings

33 Dividends

Journal

(a) Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends on Wednesday, March 31. Refer to the Chart of Accounts for exact wording of
account titles.

PAGE 1
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PAGE 1

JOURNAL ACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

1   Adjusting Entries            
2  
3  

(b) Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends on Thursday, March 31. Refer to the Chart of Accounts for exact wording of

account titles.

PAGE 1

JOURNAL ACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

1   Adjusting Entries            
2  
3  

6. EX.03-07
Effect of Omitting Adjusting Entry

Accrued salaries owed to employees for October 30 and 31 are not considered in preparing the financial statements for the year ended October 31. Indicate which items will be
erroneously stated, because of the error, on (A) the income statement for the year and (B) the balance sheet as of October 31. Also indicate whether the items in error will be
overstated or understated.

a. Income Statement

Salaries Expense
Net Income

b. Balance Sheet

Salaries Payable
Stockholders' Equity

7. EX.03-11.Guided
Adjusting Entry for Supplies

The balance in the supplies account, before adjustment at the end of the year, is $4,850.

Journalize the adjusting entry required if the amount of supplies on hand at the end of the year is $880.

8. EX.03-14.Guided
Adjusting Entries for Prepaid Insurance

The balance in the prepaid insurance account, before adjustment at the end of the year, is $27,000. Journalize the adjusting entry required under each of the following
alternatives for determining the amount of the adjustment:

a. The amount of insurance expired during the year is $20,250.

b. The amount of unexpired insurance applicable to future periods is $6,750.

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9. BE.04-01
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, retained earnings statement, or balance sheet.

1. Accumulated Depreciation—Building
2. Cash
3. Fees Earned
4. Insurance Expense
5. Prepaid Rent
6. Supplies
7. Dividends
8. Wages Expense

10. BE.04-02

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Retained earnings statement

Instructions

Blake Knudson owns and operates Grab Bag Delivery Services. On January 1, 2018, Retained Earnings had a balance of $918,000. During the year, no additional common stock was issued,

and $15,000 of dividends were paid. For the year ended December 31, 2018, Grab Bag Delivery reported a net loss of $43,500.

Prepare a retained earnings statement for the year ended December 31, 2018. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. Refer

to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement.

Labels and Amount Descriptions

Labels

December 31, 2018

For the Year Ended December 31, 2018

For the Year Ended January 1, 2018

January 1, 2018

Amount Descriptions

Additional investment during 2018

Change in retained earnings

Dividends

Retained earnings, January 1, 2018

Retained earnings, December 31, 2018

Net income

Net loss

Retained Earnings Statement

Prepare a retained earnings statement for the year ended December 31, 2018. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. Refer

to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement.

Grab Bag Delivery Services

Retained Earnings Statement

(Label)

1  
2  
3  
4  
5  

11. BE.04-03
Classified Balance Sheet

The following accounts appear in an adjusted trial balance of Kangaroo Consulting. Indicate whether each account would be reported in the current asset; property, plant, and
equipment; current liability; long-term liability; or stockholders' equity section of the December 31, 2018, balance sheet of Kangaroo Consulting.

1. Accounts Payable
2. Accounts Receivable
3. Accumulated Depreciation—Building
4. Cash
5. Common Stock
6. Note Payable (due in ten years)

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7. Supplies

8. Wages Payable

12. BE.04-05
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.

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

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