Brief Exercises
List the steps in preparing a worksheet.
BE4.1 (LO 1), K The steps in using a worksheet are presented in random order below. List the steps in
the proper order by placing numbers 1–5 in the blank spaces.
● (1) Prepare a trial balance on the worksheet.
● (3) Enter adjusted balances.
● (4) Extend adjusted balances to appropriate statement columns.
● (5)Total the statement columns, compute net income (loss), and complete the worksheet.
● (2) Enter adjustment data.
Prepare partial worksheet.
BE4.2 (LO 1), AP The ledger of Clayton Company includes the following unadjusted balances: Prepaid
Insurance $3,000, Service Revenue $58,000, and Salaries and Wages Expense $25,000. Adjusting entries
are required for (a) expired insurance $1,800; (b) services performed $1,100, but unbilled and
uncollected; and (c) accrued salaries payable $800. Enter the unadjusted balances and adjustments into a
worksheet and complete the worksheet for all accounts. (Note: You will need to add the following
accounts: Accounts Receivable, Salaries and Wages Payable, and Insurance Expense.)
The adjusting entries are as follows
a. Insurance expense A/c Dr $1,200
To Prepaid insurance A/c $1,200
(Being the insurance expense is recorded)
The work is shown below:
= $3,000 - $1,800
= $1,200
b. Account receivable Dr $1,100
To Service revenue $1,100
(Being the service performed is recorded)
c. Salaries and wages expenses Dr $800
To Salaries and wages payable $800
(Being the salaries and wages expense is recorded)
Identify worksheet columns for selected accounts.
BE4.3 (LO 1), C The following selected accounts appear in the adjusted trial balance columns of the
worksheet for Goulet Company: Accumulated Depreciation—Equipment, Depreciation Expense,
Common Stock, Dividends, Service Revenue, Supplies, and Accounts Payable. Indicate the financial
statement column (income statement Dr., balance sheet Cr., etc.) to which each balance should be
extended.
Goulet Co.
12/31/2022
Finacial Statement
Account Balance
Account Name Debit Credit
Accumulated Depreciation
Equipment $0.00
Depreciation Expense $0.00
Common Stock $0.00
Dividends $0.00
Service Revenue $0.00
Supplies $0.00
Accounts Payable $0.00
Service Revenues $0.00
Totals $0.00 $0.00
Difference $0.00
Prepare closing entries from ledger balances.
BE4.4 (LO 2), AP The ledger of Rios Company contains the following balances: Retained Earnings
$30,000, Dividends $2,000, Service Revenue $50,000, Salaries and Wages Expense $27,000, and
Supplies Expense $7,000. Prepare the closing entries at December 31.
Service Revenue 50,000 debit
Income summary 50,000 credit
--to close revenues accounts--
Income summary 34,000 debit
Salaries and Wages Expense 27,000 credit
Supplies Expense 7,000 credit
--to close expenses accounts--
Income summary 2,000 debit
Dividends 2,000 credit
--to close dividends account--
Income summary 14,000 debit
Retained Earnings 14,000 credit
BE4.5 (LO 2), AP The ledger of Rios Company contains the following balances: Retained Earnings
$30,000, Dividends $2,000, Service Revenue $50,000, Salaries and Wages Expense $27,000, and
Supplies Expense $7,000. Enter the balances in T-accounts, post the closing entries, and underline and
balance the accounts.
Goulet Co.
12/31/2022
al L
nt B
Account Name Debit Credit
Insuance Expense $0.00
Salaries and Wages Expense $0.00 $27,000.00
Dividends $2,000.00
Rent expense $0.00
Supplies Expense $7,000.00
Depressiation expense $0.00
Retained earnings $14,000.00
Service Revenues $0.00
Totals $2,000.00 $48,000.00
Difference ($46,000.00)
Journalize and post closing entries using the three-column form of account.
BE4.6 (LO 2), AP The income statement for Weeping Willow Golf Club for the month ending July 31
shows Service Revenue $16,400, Salaries and Wages Expense $8,200, Maintenance and Repairs Expense
$2,500, and Net Income $5,700. Prepare the entries to close the revenue and expense accounts. Post the
entries to the revenue and expense accounts, and complete the closing process for these accounts using the
three-column form of account.
Weeping Willow Golf
12/31/2022
al L
nt B
Account Name Debit Credit
Insuance Expense $0.00
Salaries and Wages Expense $8,200.00 $0.00
Dividends
Rent expense $0.00
Supplies Expense $0.00
Maintenance expense $2,500.00
Retained earnings $0.00
Service Revenues $16,400.00
Net income $5,700.00
Totals $10,700.00 $22,100.00
Difference ($11,400.00)
List the required steps in the accounting cycle in sequence.
BE4.8 (LO 3), K The steps in the accounting cycle are listed in random order below. List the steps in
proper sequence, assuming no worksheet is prepared, by placing numbers 1–9 in the blank spaces.
● A. Analyze business transactions.
● B. Journalize the transactions.
● C. Post to ledger accounts.
● D. Prepare a trial balance.
● E. Journalize and post adjusting entries.
● F. Prepare an adjusted trial balance.
● G. Prepare financial statements.
● H. Journalize and post-closing entries.
● I. Prepare a post-closing trial balance.
Prepare correcting entries.
BE4.9 (LO 3), AP At Creighton Company, the following errors were discovered after the transactions
had been journalized and posted. Prepare the correcting entries.
1. A collection on account from a customer for $870 was recorded as a debit to Cash $870 and a
credit to Service Revenue $870.
2. The purchase of store supplies on account for $1,570 was recorded as a debit to Supplies $1,750
and a credit to Accounts Payable $1,750.
The correction entries shall be as follows,
1. Service Revenue Dr. $ 870
Customer Account Cr. $ 870
2. Store Purchases Dr. $1,570
Accounts Payable Dr.$180
Supplies Account Cr. $1750
Prepare the current assets section of a balance sheet.
BE4.10 (LO 4), AP The balance sheet debit column of the worksheet for Hamidi Company includes the
following accounts: Accounts Receivable $12,500, Prepaid Insurance $3,600, Cash $4,100, Supplies
$5,200, and Debt Investments (short-term) $6,700. Prepare the current assets section of the balance sheet,
listing the accounts in proper sequence.
Classify accounts on balance sheet..
BE4.11 (LO 4), C The following are the major balance sheet classifications:
Current assets (CA)
Long-term investments (LTI)
Property, plant, and equipment (PPE)
Intangible assets (IA)
Current liabilities (CL)
Long-term liabilities (LTL)
Stockholders’ equity (SE)
Match each of the following accounts to its proper balance sheet classification.
Accounts payable - Current Liabilities
Accounts receivable - Current assets
Accumulated depreciation - Long-term current asset
Buildings - Fixed asset
Cash - Current Liabilities
Goodwill - Intangible asset
Income taxes payable - Current liabilities
Investment in long-term bonds - Current asset
Land - Fixed asset
Inventory - Intangible asset
Patent - Intangible asset
Supplies - Current asset
