Study Guide 6

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If the difference between the totals of Debit and Credit columns on a work sheet can be ..... Prepaid Insurance: Trial Balance Debit column should be $300.00.

SECOND REVISED

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Study Guide 6

Perfect Score

Name Identifying Accounting Terms

8 Pts.

Analyzing Accounting Practices Related to a Work Sheet Analyzing Adjustments and Extending Account Balances on a Work Sheet Total

17 Pts. 16 Pts. 41 Pts.

Your Score

Part One—Identifying Accounting Terms Directions: Select the one term in Column I that best fits each definition in Column II. Print the letter identifying your choice in the Answers column.

Column I

Answers

Column II

A. adjustments

1. The length of time for which a business summarizes and reports financial information. (p. 152)

1.

C

B. balance sheet

2. A columnar accounting form used to summarize the general ledger information needed to prepare financial statements. (p. 153)

2.

H

C. fiscal period

3. A proof of equality of debits and credits in a general ledger. (p. 154)

3.

G

D. income statement

4. Changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period. (p. 157)

4.

A

E. net income

5. A financial statement that reports assets, liabilities, and owner’s equity on a specific date. (p. 162)

5.

B

F. net loss

6. A financial statement showing the revenue and expenses for a fiscal period. (p. 163)

6.

D

G. trial balance

7. The difference between total revenue and total expenses when total revenue is greater. (p. 164)

7.

E

H. work sheet

8. The difference between total revenue and total expenses when total expenses are greater. (p. 165)

8.

F

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Part Two—Analyzing Accounting Practices Related to a Work Sheet Directions: Place a T for True or an F for False in the Answers column to show whether each of the following statements is true or false.

1. The accounting concept Consistent Reporting is being applied when a delivery business reports revenue for the number of deliveries made one year and the amount of revenue received for the deliveries made the next year. (p. 152)

Answers 1. F

2. An accounting period is also known as a fiscal period. (p. 152)

2.

T

3. Journals, ledgers, and work sheets are considered permanent records. (p. 153)

3.

F

4. All general ledger account titles are listed on a trial balance in the same order as listed on the chart of accounts. (p. 154)

4.

T

5. The four questions asked when analyzing an adjustment are: Why? Where? When? and How? (p. 158)

5.

F

6. The two accounts affected by the adjustment for supplies are Supplies and Supplies Expense. (p. 158)

6.

T

7. The two accounts affected by the adjustment for insurance are Prepaid Insurance Expense and Insurance. (p. 159)

7.

F

8. Totaling and ruling the Adjustments columns of a work sheet are necessary to prove the equality of debits and credits. (p. 160)

8.

T

9. Two financial statements are prepared from the information on the work sheet. (p. 162)

9.

T

10. Net income on a work sheet is calculated by subtracting the Income Statement Credit column total from the Income Statement Debit column total. (p. 164)

10.

F

11. If errors are found on a work sheet, they must be erased and corrected before any further work is completed. (p. 167)

11.

T

12. When two column totals are not in balance on the work sheet, the difference between the two totals is calculated and checked. (p. 167)

12.

T

13. If the difference between the totals of Debit and Credit columns on a work sheet can be evenly divided by 9, then the error is most likely in addition. (p. 167)

13.

F

14. If there are errors in the work sheet’s Trial Balance columns, it might be because not all general ledger account balances were copied in the Trial Balance column correctly. (p. 168)

14.

T

15. Errors in general ledger accounts should never be erased. (p. 169)

15.

T

16. Most errors occur in doing arithmetic. (p. 169)

16.

T

17. The best way to prevent errors is to use a calculator. (p. 169)

17.

F

118 • Working Papers TE

CENTURY 21 ACCOUNTING, 9TH EDITION

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Name

Date

Class

Part Three—Analyzing Adjustments and Extending Account Balances on a Work Sheet Directions: For each account listed below, determine in which work sheet column(s) an amount typically will be written. Place a check mark in the proper Answers column to show your answer.

Adjustments

Income Statement

Balance Sheet

Debit Credit (pp. 157–160)

Debit Credit (p. 163)

Debit Credit (p. 162)

1. Cash



2. Petty Cash

 

3. Accounts Receivable— Imagination Station 4. Supplies





5. Prepaid Insurance



 

6. Accounts Payable— Suburban Office Supplies



7. J. Nichols, Capital



8. J. Nichols, Drawing 9. Income Summary



10. Sales



11. Advertising Expense 12. Insurance Expense





13. Miscellaneous Expense



14. Rent Expense



15. Supplies Expense 16. Utilities Expense COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING



  Chapter 6 • 119

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4 5 6 00 7 5 0 00

Accts. Rec.—Ruby Prince

Supplies

Prepaid Insurance

Accts. Pay.—R. Navarro

Gary Baldwin, Capital

3

4

5

6

7

6

7

14 8 8 5 00

Chapter 6

Miscellaneous Expense

Supplies Expense

Utilities Expense

13

14

15

19

18

17

19 7 6 0 00 19 7 6 0 00

1 1 0 0 00

3 7 8 00

3 8 1 00

(a) 1 3 1 00

18

4 3 2 0 00 16 9 7 0 00 16 9 7 0 00 4 3 2 0 00

19

17

16

1 5 3 0 00

4 3 2 0 00 16 9 7 0 00 15 4 4 0 00

15

14

13

12

1 5 3 0 00

2 7 9 0 00

1 1 0 0 00

1 3 1 00

3 7 8 00

2 5 0 00

11

Date

Net Income

Insurance Expense

12

9 3 1 00

Page 121

16

Advertising Expense

Name

11

10

8

6

5

4

3

2

1

5 5 5 00

CREDIT

8

Sales

3 4 0 0 00

5 0 0 00

3 2 5 00

2 7 9 5 00

1 5 0 00

9 8 0 0 00

DEBIT

BALANCE SHEET

10

4 3 2 0 00

CREDIT

7

9

9 3 1 00

DEBIT

INCOME STATEMENT

5

Income Summary

3 8 1 00

(b) 2 5 0 00

(a) 1 3 1 00

CREDIT

4

9

(b) 2 5 0 00

DEBIT

ADJUSTMENTS

Gary Baldwin, Drawing 4 3 2 0 00

14 8 8 5 00

5 5 5 00

CREDIT

3

8

3 4 0 0 00

2 7 9 5 00

1 5 0 00

Petty Cash

2

9 8 0 0 00

Cash

1

DEBIT

2

8:54 AM

ACCOUNT TITLE

TRIAL BALANCE

For Month Ended February 28, 20 – –

Work Sheet

Golden Tan

10/30/07

1

6-1 Recording the trial balance on a work sheet 6-2 Planning adjustments on a work sheet 6-3 Completing a work sheet

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6-1, 6-2, and 6-3 WORK TOGETHER, pp. 155, 161, 166

Work Sheet for a Service Business • 121

122 • Working Papers TE

2 3 8 00 3 2 5 00

Accts. Rec.—Burt Strog

Supplies

Prepaid Insurance

Accts. Pay.—Janet Dao

Jabbo West, Capital

Jabbo West, Drawing

3

4

5

6

7

8

Net Income

11 8 8 1 00 11 8 8 1 00

6 0 0 00 2 1 8 00

2 1 8 00

7 7 4 1 00

18

4 1 4 0 00 10 4 1 8 00 10 4 1 8 00 4 1 4 0 00

19

17

16

2 6 7 7 00

4 1 4 0 00 10 4 1 8 00

15

14

13

2 6 7 7 00

1 4 6 3 00

6 0 0 00

1 1 8 00

1 8 9 00

12

Page 122

19

18

17

16

Utilities Expense

15

(a) 1 1 8 00

Supplies Expense

14

1 8 9 00

Miscellaneous Expense

13

1 0 0 00

Insurance Expense

12

11

Advertising Expense

11

(b) 1 0 0 00

7

7 4 4 3 00

8

6

5

4

3

2

1

2 9 8 00

CREDIT

10

1 7 0 0 00

2 2 5 00

1 2 0 00

1 4 9 8 00

7 5 00

6 8 0 0 00

DEBIT

8

Sales

4 1 4 0 00

CREDIT

BALANCE SHEET

10

4 5 6 00

DEBIT

7

9

4 5 6 00

(b) 1 0 0 00

(a) 1 1 8 00

6

INCOME STATEMENT

5

Income Summary 4 1 4 0 00

7 4 4 3 00

2 9 8 00

4

CREDIT

ADJUSTMENTS DEBIT

3

9

1 7 0 0 00

1 4 9 8 00

CREDIT

2

8:54 AM

7 5 00

Petty Cash

2

6 8 0 0 00

Cash

DEBIT

TRIAL BALANCE

For Month Ended December 31, 20 – –

Work Sheet

Copa’s Copies

10/30/07

1

ACCOUNT TITLE

1

6-1 Recording the trial balance on a work sheet 6-2 Planning adjustments on a work sheet 6-3 Completing a work sheet

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Name

Date

6-4

Class

WORK TOGETHER, p. 170

Finding and correcting errors in accounting records 1., 2.

GENERAL LEDGER

ACCOUNT

Cash

DATE

ACCOUNT NO.

ITEM

20 – –

POST. REF.

Sept. 1 30

1

30

2

ACCOUNT

2

ITEM

20 – –

DATE

ITEM

ITEM

Sept. 3 20

DATE

ITEM

20 – –

Sept. 1

POST. REF.

POST. REF.

CREDIT DEBIT

1 0 0 0 00

CREDIT

1 0 0 0 00

CREDIT DEBIT

6 0 0 00

2

4 2 5 00

6 0 0 00 1 0 2 5 00 7 2 5 00

CREDIT DEBIT

1 5 0 00

2

1 5 0 00

CREDIT

1 5 0 00 3 0 0 00 4 0 0 00

ACCOUNT NO.

210

BALANCE DEBIT

CREDIT DEBIT

CREDIT

3 0 0 00

3 0 0 00

1 5 0 00

1 5 0 00

Paul Coty, Capital

ACCOUNT NO.

POST. REF.

140

BALANCE DEBIT

1

2

ITEM

CREDIT

ACCOUNT NO.

POST. REF.

130

BALANCE DEBIT

1

POST. REF.

120

BALANCE DEBIT

1

Sept. 4 15

DATE

4 0 0 0 00 11 0 0 0 00 7 0 0 0 00 15 0 0 0 00 4 2 5 0 00 6 7 5 0 00 8 0 0 0 00

Accounts Payable—Powers Supply

20 – –

ACCOUNT

4 0 0 0 00

Prepaid Insurance

20 – –

ACCOUNT

CREDIT

ACCOUNT NO.

Sept. 2 25

DATE

DEBIT

Supplies

20 – –

ACCOUNT

CREDIT

ACCOUNT NO.

1

Sept. 12

ACCOUNT

BALANCE DEBIT

Accounts Receivable—Sharon Mann

DATE

110

310

BALANCE DEBIT

1 Chapter 6

CREDIT DEBIT

5 0 0 0 00

CREDIT

5 0 0 0 00

Work Sheet for a Service Business • 123

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WORK TOGETHER (continued)

1., 2. ACCOUNT

GENERAL LEDGER

Paul Coty, Drawing

DATE

ITEM

20 – –

ITEM

ITEM

3 0 0 00

POST. REF.

CREDIT DEBIT

ITEM

DEBIT

ITEM

20 – –

Sept. 9 27

1 9 0 0 00

CREDIT DEBIT

124 • Working Papers TE

CREDIT

ACCOUNT NO.

POST. REF.

CREDIT DEBIT

1

1 5 0 00

2

2 5 00

POST. REF.

520

BALANCE DEBIT

CREDIT

1 5 0 00 1 7 5 00 1 2 5 00

ACCOUNT NO.

ITEM

510

BALANCE DEBIT

Supplies Expense

DATE

CREDIT

1 9 0 0 00 1 8 7 5 00

ACCOUNT NO.

POST. REF.

410

CREDIT

Miscellaneous Expense

DATE

CREDIT

BALANCE DEBIT

Insurance Expense

DATE

330

BALANCE DEBIT

2

Sept. 30

ACCOUNT

3 0 0 00

CREDIT

ACCOUNT NO.

20 – –

ACCOUNT

DEBIT

Sales

DATE

ACCOUNT

CREDIT

ACCOUNT NO.

POST. REF.

320

BALANCE DEBIT

Income Summary

DATE

ACCOUNT

POST. REF.

2

Sept. 30

ACCOUNT

ACCOUNT NO.

530

BALANCE DEBIT

CREDIT DEBIT

CREDIT

COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING

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Page 125

Name

Date

6-4

Class

WORK TOGETHER (continued)

1.

ERRORS

IN GENERAL LEDGER ACCOUNTS 1. Cash account: First Sept. 30 balance should be $11,000.00 instead of $15,000.00. Final balance on Sept. 30 should be $4,250.00 instead of $8,000.00. 2. Supplies account: Final balance on Sept. 25 should be $1,025.00 instead of $725.00. 3. Prepaid Insurance account: Final balance on Sept. 20 should be $300.00 instead of $400.00. 4. Sales account: Final balance on Sept. 30 should be $1,900.00 instead of $1,875.00. 5. Miscellaneous Expense account: Final balance on Sept. 27 should be $175.00 instead of $125.00. ON WORK SHEET 1. Cash: Trial Balance Debit column should be $4,250.00. Balance Sheet Debit column should be $4,250.00. 2. Supplies: Trial Balance Debit column should be $1,025.00. Adjustments column amount should be in the Credit column. Balance Sheet Debit column should be $635.00. 3. Prepaid Insurance: Trial Balance Debit column should be $300.00. Adjustments column amount should be in Credit column. Balance Sheet Debit column should be $205.00. 4. Paul Coty, Drawing: Balance Sheet amount should be in Debit column. 5. Sales: Trial Balance Credit column should be $1,900.00. Income Statement Credit column should be $1,900.00. 6. Insurance Expense: Adjustments column amount should be in Debit column. Income Statement amount should be in Debit column. 7. Miscellaneous Expense: Trial Balance Debit column should be $175.00. Income Statement Debit column should be $175.00. 8. Supplies Expense: Adjustments column amount should be in Debit column. Income Statement amount should be in Debit column. 9. Column totals: Trial Balance columns should be $7,050.00. Income Statement Debit column total should be $660.00. Income Statement Credit column total should be $1,900.00. Balance Sheet Debit column total should be $6,390.00. Balance Sheet Credit column total should be $5,150.00. 10. Net Income should be $1,240.00. 11. Proving totals: Income Statement totals should be $1,900.00. Balance Sheet totals should be $6,390.00.

Chapter 6

Work Sheet for a Service Business • 125

126 • Working Papers TE 13 14 15

5 1 6 0 00 2 3 6 0 00 10 6 1 0 00 10 6 1 0 00

2 2 0 8 00 2 3 6 0 00

18 19 20 21

19

20

21

2 3 6 0 00 10 6 1 0 00

5 4 5 0 00 1 5 2 00

18

4 8 5 00

12

11

17

4 8 5 00

7

3 0 0 00

17

7 0 2 5 00

6

5 0 0 0 00

10

5

1 5 0 00

4

16

Net Income

10 5 5 0 00

3 9 0 00

4 9 5 00

16

15

14

13

(a) 3 9 0 00

Supplies Expense

12

1 2 5 00

1 5 2 00

Miscellaneous Expense

11

9 5 00

Insurance Expense

10

1 8 7 5 00 9 5 00

Sales

9

(b)

9

Income Summary

8

1 8 7 5 00

8

Paul Coty, Drawing

7

3 0 0 00

Paul Coty, Capital

6

5 0 0 0 00

Accts. Pay.—Powers Supply

5

9 5 00

3

8:54 AM

(b)

4 0 0 00

Prepaid Insurance

1 1 1 5 00

2

4

1

7 2 5 00

CREDIT

10/30/07

1 0 0 0 00

8 0 0 0 00

DEBIT

8

Supplies

CREDIT

BALANCE SHEET

3

DEBIT

7

1 0 0 0 00

1 5 0 00

6

INCOME STATEMENT

5

Accts. Rec.—Sharon Mann (a) 3 9 0 00

4

CREDIT

ADJUSTMENTS DEBIT

3

2

CREDIT

2

8 0 0 0 00

DEBIT

TRIAL BALANCE

For Month Ended September 30, 20 – –

Cash

ACCOUNT TITLE

1

Work Sheet

LeafyLift

6-4

1

1.

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SECOND REVISED

WORK TOGETHER (continued)

COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING

Income Summary

8

Chapter 6

21

21

15

6 3 9 0 00

20

14

1 2 4 0 00

20

13

5 1 5 0 00

19

6 3 9 0 00

6 3 9 0 00

19

1 9 0 0 00

1 9 0 0 00

18

1 9 0 0 00

1 2 4 0 00

6 6 0 00

12

11

10

9

8

18

4 8 5 00

6

5 0 0 0 00

7

5

4

3

2

1

1 5 0 00

CREDIT

8

17

4 8 5 00

3 9 0 00

1 7 5 00

3 0 0 00

2 0 5 00

9 5 00

(b)

1 0 0 0 00

4 2 5 0 00

DEBIT

6 3 5 00

1 9 0 0 00

CREDIT

BALANCE SHEET

(a) 3 9 0 00

9 5 00

DEBIT

7

17

7 0 5 0 00

9 5 00

(a) 3 9 0 00

(b)

6

INCOME STATEMENT

5

16

Net Income

7 0 5 0 00

1 9 0 0 00

4

CREDIT

ADJUSTMENTS DEBIT

3

16

15

14

13

Supplies Expense

1 7 5 00

3 0 0 00

5 0 0 0 00

1 5 0 00

CREDIT

2

Name

12

Miscellaneous Expense

Paul Coty, Drawing

7

11

Paul Coty, Capital

6

Insurance Expense

Accts. Pay.—Powers Supply

5

10

Prepaid Insurance

4

Sales

1 0 2 5 00

Supplies

3

9

1 0 0 0 00

Accts. Rec.—Sharon Mann

2

3 0 0 00

4 2 5 0 00

DEBIT

TRIAL BALANCE

For Month Ended September 30, 20 – –

8:54 AM

Cash

ACCOUNT TITLE

1

6-4

Work Sheet

LeafyLift

10/30/07

1

3.

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WORK TOGETHER (concluded)

Work Sheet for a Service Business • 127

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ON YOUR OWN, p. 170

Finding and correcting errors in accounting records 1., 2.

GENERAL LEDGER ACCOUNT

Cash

ACCOUNT NO.

DATE

POST. REF.

ITEM

20 – –

Nov. 1 30

1

30

2

ACCOUNT

2

ITEM

Nov. 2 25

ITEM

20 – –

POST. REF.

12 0 0 0 00 18 4 9 5 00 18 9 4 5 00 6 4 9 5 00 12 9 4 5 00 5 5 5 0 00 13 3 9 5 00

CREDIT DEBIT

3 0 0 00

2

1 0 0 00

3 0 0 00 3 0 00 4 0 0 00 1 3 0 00

ITEM

20 – –

CREDIT DEBIT

3 5 0 00 5 3 0 00

3 5 0 00

2

20 – –

Nov. 1

128 • Working Papers TE

ITEM

CREDIT DEBIT

CREDIT

4 0 0 00

4 0 0 00 2 5 0 00 5 5 0 00

1 5 0 00

ACCOUNT NO.

POST. REF.

1

210

BALANCE DEBIT

Nadine Fritz, Capital

DATE

CREDIT

ACCOUNT NO.

POST. REF.

130

BALANCE DEBIT

1

Nov. 4 15

CREDIT

ACCOUNT NO.

POST. REF.

120

BALANCE DEBIT

Accounts Payable—NW Electric

DATE

CREDIT

12 0 0 0 00

1

1

Nov. 3

ACCOUNT

DEBIT

Prepaid Insurance

DATE

ACCOUNT

CREDIT

ACCOUNT NO.

20 – –

ACCOUNT

BALANCE DEBIT

Supplies

DATE

110

310

BALANCE DEBIT

CREDIT DEBIT

12 0 0 0 00

CREDIT

12 0 0 0 00

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Page 129

Name

6-4

Date

ON YOUR OWN (continued)

1., 2. ACCOUNT

GENERAL LEDGER

Nadine Fritz, Drawing

DATE

ITEM

20 – –

ACCOUNT

ITEM

ITEM

POST. REF.

ITEM

CREDIT DEBIT

ITEM

CREDIT DEBIT

20 – –

Nov. 9 27

CREDIT

1 9 5 0 00

1 9 5 0 00

CREDIT DEBIT

CREDIT

CREDIT DEBIT

1

1 5 0 00

2

5 5 00

CREDIT

1 5 0 00 2 0 5 00 9 5 00

ACCOUNT NO.

POST. REF.

520

BALANCE DEBIT

Supplies Expense ITEM

510

BALANCE DEBIT

ACCOUNT NO.

POST. REF.

410

BALANCE DEBIT

Miscellaneous Expense

DATE

CREDIT

ACCOUNT NO.

POST. REF.

330

BALANCE DEBIT

Insurance Expense

DATE

CREDIT

3 0 0 00

3 0 0 00

2

Nov. 30

ACCOUNT

DEBIT

ACCOUNT NO.

20 – –

ACCOUNT

CREDIT

ACCOUNT NO.

POST. REF.

320

BALANCE DEBIT

Sales

DATE

ACCOUNT

POST. REF.

Income Summary

DATE

ACCOUNT

ACCOUNT NO.

2

Nov. 30

DATE

Class

530

BALANCE DEBIT

Chapter 6

CREDIT DEBIT

CREDIT

Work Sheet for a Service Business • 129

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SECOND REVISED

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ON YOUR OWN (continued)

1.

ERRORS

IN GENERAL LEDGER ACCOUNTS 1. Cash account: First Nov. 30 balance should be $18,495.00 instead of $18,945.00. Final balance on Nov. 30 should be $12,945.00 instead of $13,395.00. 2. Supplies account: Nov. 2 balance should be $300.00 instead of $30.00. Final balance on Nov. 25 should be $400.00 instead of $130.00. 3. Prepaid Insurance account: Final balance on Nov. 3 should be $350.00 instead of $530.00. 4. Accts. Pay.—NW Electric account: Final balance on Nov. 15 should be $250.00 instead of $550.00. 5. Miscellaneous Expense account: Final balance on Nov. 27 should be $205.00 instead of $95.00. ON WORK SHEET 1. Cash: Trial Balance Debit column should be $12,945.00. Balance Sheet Debit column should be $12,945.00. 2. Supplies: Trial Balance Debit column should be $400.00. Adjustments column amount should be in the Credit column. Balance Sheet Debit column should be $310.00. 3. Prepaid Insurance: Trial Balance Debit column should be $350.00. Adjustments column amount should be in Credit column. Balance Sheet Debit column should be $246.00. 4. Accts. Pay.—NW Electric: Trial Balance Credit column should be $250.00. Balance Sheet Credit column should be $250.00. 5. Nadine Fritz, Drawing: Balance Sheet amount should be in Debit column. 6. Insurance Expense: Adjustments column amount should be in Debit column. Income Statement amount should be in Debit column. 7. Miscellaneous Expense: Trial Balance Debit column should be $205.00. Income Statement Debit column should be $205.00. 8. Supplies Expense: Adjustments column amount should be in Debit column. Income Statement amount should be in Debit column. 9. Column totals: Trial Balance columns should be $14,200.00. Income Statement Debit column total should be $399.00. Income Statement Credit column total should be $1,950.00. Balance Sheet Debit column total should be $13,801.00. Balance Sheet Credit column total should be $12,250.00. 10. Net Income should be $1,551.00. 11. Proving totals: Income Statement totals should be $1,950.00. Balance Sheet totals should be $13,801.00.

130 • Working Papers TE

COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING

Chapter 6

Supplies Expense

11

18 19 20 21 22

18

19

20

21

22

14

2 1 4 4 00 14 2 5 8 00 14 2 5 8 00 2 1 4 4 00

17

13

1 4 0 8 00 2 0 8 5 00

17

12

11

2 1 4 4 00 14 2 5 8 00 12 8 5 0 00 5 9 00

9 0 00

16

1 9 4 00

9 0 00

10

9

16

1 9 4 00

(a)

5 9 00

1 0 4 00

6

3 0 0 00

15

14 4 5 0 00 14 5 0 0 00

9 5 00

(b) 1 0 4 00

5

12 0 0 0 00

15

14

13

Net Income

Miscellaneous Expense

10

1 9 5 0 00

4

5 5 0 00

3

Name

12

Insurance Expense

9

8

Sales

8

1 9 5 0 00

7

Income Summary

7

3 0 0 00

Nadine Fritz, Drawing

6

12 0 0 0 00

Nadine Fritz, Capital

6 4 3 00

2

5

5 5 0 00

1

Accts. Pay.—NW Electric

CREDIT

4

(b) 1 0 4 00

2 2 0 00

13 3 9 5 00

DEBIT

8

5 3 0 00

CREDIT

BALANCE SHEET

Prepaid Insurance

DEBIT

7

3

9 0 00

6

INCOME STATEMENT

5

1 3 0 00

(a)

4

CREDIT

ADJUSTMENTS DEBIT

3

Supplies

CREDIT

2

2

13 3 9 5 00

DEBIT

TRIAL BALANCE

For Month Ended November 30, 20 – –

8:54 AM

Cash

ACCOUNT TITLE

1

6-4

Work Sheet

Your Personal Trainer

10/30/07

1

2.

BTE_Ch06-121-140.qxd Page 131

SECOND REVISED

Date Class

ON YOUR OWN (continued)

Work Sheet for a Service Business • 131

132 • Working Papers TE

Income Summary

Sales

Insurance Expense

7

8

9

12 13 14

1 5 5 1 00 1 9 5 0 00 13 8 0 1 00 13 8 0 1 00

1 5 5 1 00 1 9 5 0 00

17 18 19 20 21

18

19

20

21

3 9 9 00

1 9 5 0 00 13 8 0 1 00 12 2 5 0 00

11

10

9

8

7

17

1 9 4 00

9 0 00

2 0 5 00

5

12 0 0 0 00

6

4

3

2

1

2 5 0 00

CREDIT

8

16

1 9 4 00

9 0 00

1 0 4 00

3 0 0 00

2 4 6 00

(b) 1 0 4 00

12 9 4 5 00

DEBIT

3 1 0 00

1 9 5 0 00

CREDIT

BALANCE SHEET

16

(a)

(b) 1 0 4 00

DEBIT

7

15

Net Income

14 2 0 0 00 14 2 0 0 00

2 0 5 00

1 9 5 0 00

12 0 0 0 00

2 5 0 00

6

INCOME STATEMENT

5

9 0 00

(a)

CREDIT

4

15

14

13

12

Supplies Expense

Nadine Fritz, Drawing

6

11

Nadine Fritz, Capital

5

Miscellaneous Expense

Accts. Pay.—NW Electric

4

DEBIT

ADJUSTMENTS

8:54 AM

10

3 5 0 00

Prepaid Insurance

3

CREDIT

3

10/30/07

3 0 0 00

4 0 0 00

Supplies

2

12 9 4 5 00

DEBIT

2

For Month Ended November 30, 20 – – TRIAL BALANCE

Cash

ACCOUNT TITLE

1

Work Sheet

Your Personal Trainer

6-4

1

3.

BTE_Ch06-121-140.qxd Page 132

SECOND REVISED

ON YOUR OWN (concluded)

COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING

Chapter 6

Miscellaneous Expense

Supplies Expense

Utilities Expense

13

14

15

18

2 2 7 0 00 14 0 7 5 00 14 0 7 5 00 2 2 7 0 00

20

17

16

7 9 4 00

2 2 7 0 00 14 0 7 5 00 13 2 8 1 00 7 9 4 00

1 4 7 6 00

15

14

20

5 9 0 00

3 6 2 00

4 4 0 00

13

12

19

5 9 0 00

(a) 4 4 0 00

1 8 4 00

1 5 0 00

11

19

18

17

15 5 5 1 00 15 5 5 1 00

3 6 2 00

1 8 4 00

(b) 1 5 0 00

3 4 0 00

Date

Net Income

Insurance Expense

12

3 4 0 00

2 2 7 0 00

7

12 9 2 6 00

8

6

3 5 5 00

5

4

Page 133

16

Advertising Expense

Sales

10

5 0 0 00

7 5 0 00

2 5 0 00

3

Name

11

10

Income Summary

9

2 2 7 0 00

9

Sunthi Ling, Drawing

8

5 0 0 00

Sunthi Ling, Capital

7

12 9 2 6 00

Accts. Pay.—Russell Goodland

6

3 5 5 00

9 0 0 00

Prepaid Insurance

5

(b) 1 5 0 00

6 9 0 00

8 5 5 00

2

Supplies

1

4

CREDIT

8 5 5 00

1 0 0 00

11 6 2 0 00

DEBIT

8

Accts. Rec.—Leslie Naples

CREDIT

BALANCE SHEET

3

DEBIT

7

1 0 0 00 (a) 4 4 0 00

6

INCOME STATEMENT

5

Petty Cash

CREDIT

4

2

11 6 2 0 00

DEBIT

ADJUSTMENTS

Cash

CREDIT

3

1

DEBIT

2

8:54 AM

ACCOUNT TITLE

TRIAL BALANCE

For Month Ended June 30, 20 – –

Work Sheet

Roseville Rental

10/30/07

1

6-1 Recording the trial balance on a work sheet 6-2 Planning adjustments on a work sheet 6-3 Completing a work sheet

BTE_Ch06-121-140.qxd

SECOND REVISED

Class

6-1, 6-2, and 6-3 APPLICATION PROBLEMS, pp. 172, 173

Work Sheet for a Service Business • 133

BTE_Ch06-121-140.qxd

6-4

10/30/07

8:54 AM

SECOND REVISED

Page 134

APPLICATION PROBLEM, p. 173

Finding and correcting errors in accounting records 1., 2.

GENERAL LEDGER

Cash

ACCOUNT

DATE

ACCOUNT NO.

ITEM

20 – –

POST. REF.

Apr. 1 30

1

30

2

2

DATE

ITEM

DEBIT

ITEM

20 – –

8 5 0 0 00 10 0 3 5 00 10 3 0 5 00 1 5 3 5 00 7 6 9 5 00 2 3 4 0 00 7 9 6 5 00

POST. REF.

CREDIT DEBIT

20 – –

5 0 0 00

CREDIT DEBIT

2

6 3 0 00

6 3 0 00

20 – –

Apr. 1

134 • Working Papers TE

ITEM

CREDIT DEBIT

CREDIT

7 0 0 00

7 0 0 00 5 0 0 00

2 0 0 00

ACCOUNT NO.

POST. REF.

1

210

BALANCE DEBIT

Ervin Watkins, Capital

DATE

CREDIT

ACCOUNT NO.

POST. REF.

130

BALANCE DEBIT

1

Apr. 4 15

CREDIT

5 0 0 00 5 0 00

Accounts Payable—Archer Supplies ITEM

120

BALANCE DEBIT

ACCOUNT NO.

1

Apr. 3

DATE

CREDIT

8 5 0 0 00

Prepaid Insurance

DATE

ACCOUNT

POST. REF.

1

Apr. 2

ACCOUNT

CREDIT

ACCOUNT NO.

20 – –

ACCOUNT

BALANCE DEBIT

Supplies

ACCOUNT

110

310

BALANCE DEBIT

CREDIT DEBIT

8 5 0 0 00

CREDIT

8 5 0 0 00 5 8 0 0 00

COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING

BTE_Ch06-121-140.qxd

10/30/07

8:54 AM

SECOND REVISED

Page 135

Name

6-4

Date

APPLICATION PROBLEM (continued)

1., 2. ACCOUNT

GENERAL LEDGER

Ervin Watkins, Drawing

DATE

ITEM

20 – –

ACCOUNT

ITEM

ITEM

POST. REF.

ITEM

CREDIT DEBIT

ITEM

CREDIT DEBIT

20 – –

Apr. 9 27

CREDIT

9 0 0 00 9 9 0 00

9 0 0 00

CREDIT DEBIT

CREDIT

520

BALANCE DEBIT

CREDIT DEBIT

CREDIT

1

3 5 0 00

3 5 0 00

3 5 0 00

2

1 2 5 00

4 7 5 00

2 2 5 00

Supplies Expense

ACCOUNT NO.

ITEM

510

BALANCE DEBIT

ACCOUNT NO.

POST. REF.

410

BALANCE DEBIT

Miscellaneous Expense

DATE

CREDIT

ACCOUNT NO.

POST. REF.

330

BALANCE DEBIT

Insurance Expense

DATE

CREDIT

6 0 0 00

6 0 0 00

2

Apr. 30

DATE

DEBIT

ACCOUNT NO.

20 – –

ACCOUNT

CREDIT

ACCOUNT NO.

POST. REF.

320

BALANCE DEBIT

Sales

DATE

ACCOUNT

POST. REF.

Income Summary

DATE

ACCOUNT

ACCOUNT NO.

2

Apr. 30

ACCOUNT

Class

POST. REF.

530

BALANCE DEBIT

Chapter 6

CREDIT DEBIT

CREDIT

Work Sheet for a Service Business • 135

BTE_Ch06-121-140.qxd

6-4

10/30/07

8:54 AM

SECOND REVISED

Page 136

APPLICATION PROBLEM (continued)

1.

ERRORS

IN GENERAL LEDGER ACCOUNTS 1. Cash account: First Apr. 30 balance should be $10,035.00 instead of $10,305.00. Final balance on Apr. 30 should be $7,695.00 instead of $7,965.00. 2. Supplies account: Final balance on Apr. 2 should be $500.00 instead of $50.00. 3. Ervin Watkins, Capital: Final balance on Apr. 1 should be $8,500.00 instead of $5,800.00. 4. Sales account: Final balance on Apr. 30 should be $900.00 instead of $990.00. 5. Miscellaneous Expense account: Apr. 9 balance should be a debit of $350.00 instead of a credit. Apr. 27 balance should be a debit of $475.00 instead of a credit of $225.00. ON WORK SHEET 1. Cash: Trial Balance Debit column should be $7,695.00 Balance Sheet Debit column should be $7,695.00. 2. Supplies: Trial Balance Debit column should be $500.00. Adjustment should be labeled (a). Balance Sheet column should be a debit of $200.00. 3. Prepaid Insurance: Adjustments column amount should be in Credit column. Balance Sheet Debit column should be $420.00. 4. Ervin Watkins, Capital: Trial Balance Credit column should be $8,500.00. Balance Sheet Credit column should be $8,500.00. 5. Sales: Trial Balance Credit column should be $900.00. Income Statement Credit column should be $900.00. 6. Insurance Expense: Adjustments column amount should be in Debit column. Income Statement amount should be in Debit column. 7. Miscellaneous Expense: Trial Balance Debit column should be $475.00. Income Statement Debit column should be $475.00. 8. Supplies Expense: Adjustment should be labeled (a). 9. Column totals: Trial Balance columns should be $9,900.00. Income Statement Debit column total should be $985.00. Income Statement Credit column total should be $900.00. Balance Sheet Debit column total should be $8,915.00. Balance Sheet Credit column total should be $9,000.00. 10. Net Loss should be $85.00. 11. Proving totals: Income Statement totals should be $985.00. Balance Sheet totals should be $9,000.00.

136 • Working Papers TE

COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING

Sales

8

Chapter 6

19 20 21

19

20

21

14

13

12

18

8 7 9 6 00

2 2 4 6 00

6 5 5 0 00

18

8 7 9 6 00

8 7 9 6 00

17

1 2 0 0 00

1 2 0 0 00

17

1 2 0 0 00

6 7 5 00

5 2 5 00

11

10

9

16

5 1 0 00

3 0 0 00

2 1 0 00

8

7

6

5

4

3

2

1

16

5 1 0 00

(b) 3 0 0 00

2 5 0 00

CREDIT

15

Net Income

7 2 9 0 00

9 9 0 00

6 0 0 00

2 4 0 00

7 9 5 6 00

DEBIT

8

5 8 0 0 00

9 9 0 00

CREDIT

BALANCE SHEET

5 8 0 0 00

2 2 5 00

DEBIT

7

5 0 0 00

(b) 2 1 0 00

(b) 3 0 0 00

6

INCOME STATEMENT

5

5 0 0 00

(b) 2 1 0 00

4

CREDIT

ADJUSTMENTS DEBIT

3

15

14

13

9 4 7 0 00

2 2 5 00

6 0 0 00

6 3 0 00

5 0 00

CREDIT

2

Name

12

Supplies Expense

Income Summary

7

11

Ervin Watkins, Drawing

6

Miscellaneous Expense

Ervin Watkins, Capital

5

10

Accts. Pay.—Archer Supplies

4

Insurance Expense

Prepaid Insurance

3

9

Supplies

2

7 9 6 5 00

DEBIT

TRIAL BALANCE

For Month Ended April 30, 20 – –

8:54 AM

Cash

ACCOUNT TITLE

1

6-4

Work Sheet

EverClean

10/30/07

1

1.

BTE_Ch06-121-140.qxd Page 137

SECOND REVISED

Date Class

APPLICATION PROBLEM (continued)

Work Sheet for a Service Business • 137

138 • Working Papers TE

Ervin Watkins, Capital

Ervin Watkins, Drawing

Income Summary

Sales

Insurance Expense

Miscellaneous Expense

Supplies Expense

5

6

7

8

9

10

11

19 20 21

20

21

14

19

9 0 0 0 00

13

12

18

9 0 0 0 00

9 8 5 00

9 0 0 0 00

18

8 5 00

8 9 1 5 00 8 5 00

9 0 0 00

17

9 8 5 00

9 8 5 00

11

10

9

8

7

17

5 1 0 00

3 0 0 00

4 7 5 00

5

8 5 0 0 00

6

4

3

2

1

5 0 0 00

CREDIT

8

16

5 1 0 00

2 1 0 00

6 0 0 00

4 2 0 00

(b) 2 1 0 00

7 6 9 5 00

DEBIT

2 0 0 00

9 0 0 00

CREDIT

BALANCE SHEET

16

9 9 0 0 00

(a) 3 0 0 00

(b) 2 1 0 00

DEBIT

7

15

9 9 0 0 00

4 7 5 00

9 0 0 00

8 5 0 0 00

5 0 0 00

6

INCOME STATEMENT

5

(a) 3 0 0 00

CREDIT

4

15

14

13

Net Loss

Accts. Pay.—Archer Supplies

4

DEBIT

ADJUSTMENTS

8:54 AM

12

6 3 0 00

Prepaid Insurance

3

CREDIT

3

10/30/07

6 0 0 00

5 0 0 00

Supplies

2

7 6 9 5 00

DEBIT

2

For Month Ended April 30, 20 – – TRIAL BALANCE

Cash

ACCOUNT TITLE

1

Work Sheet

EverClean

6-4

1

3.

BTE_Ch06-121-140.qxd Page 138

SECOND REVISED

APPLICATION PROBLEM (concluded)

COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING

5 1 1 00 8 5 5 00

Accts. Rec.—Bernard Corbett

Supplies

Prepaid Insurance

Accts. Pay.—Spooner Supplies

Paulo Gutierrez, Capital

Paulo Gutierrez, Drawing

3

4

5

6

7

8

Chapter 6

Supplies Expense

Utilities Expense

15

16

4 9 5 0 00 5 0 00 5 0 0 0 00

5 0 00 2 4 5 0 00

2 4 0 0 00

5 0 0 0 00 5 0 0 0 00

19

18

17

21

2 4 5 0 00

2 4 5 0 00

21

9 3 5 00

16

15

20

7 4 0 0 00

5 0 0 00

6 3 5 00

14

20

19

18

7 4 0 0 00

(a) 6 3 5 00

3 7 5 00

13

12

Date

Net Loss

Rent Expense

14

1 9 0 00

3 0 0 00

Page 139

17

3 7 5 00

Miscellaneous Expense

13

5 0 0 00

1 9 0 00

Insurance Expense

12

Advertising Expense

11

Name

11

10

9 3 5 00

7

4 5 0 0 00

8

6

5

4

3

2

1

5 0 0 00

CREDIT

Sales (b) 3 0 0 00

4 4 0 00

8 0 0 00

2 2 0 00

5 1 1 00

1 5 0 00

2 8 2 9 00

DEBIT

8

10

2 4 0 0 00

CREDIT

BALANCE SHEET

9

4 5 0 00

DEBIT

7

Income Summary 2 4 0 0 00

4 5 0 0 00

5 0 0 00

(b) 3 0 0 00

(a) 6 3 5 00

6

INCOME STATEMENT

5

9

4 5 0 00

4 4 0 00

1 1 0 0 00

1 5 0 00

Petty Cash

2

2 8 2 9 00

Cash

4

CREDIT

ADJUSTMENTS DEBIT

3

8:54 AM

1

CREDIT

2

For Month Ended April 30, 20 – – TRIAL BALANCE DEBIT

1

6-5

Work Sheet

Bonita Bubbles

10/30/07

ACCOUNT TITLE

Completing a work sheet

BTE_Ch06-121-140.qxd

SECOND REVISED

Class

MASTERY PROBLEM, pp. 173, 174

Work Sheet for a Service Business • 139

140 • Working Papers TE

Don Arnodt, Capital

Don Arnodt, Drawing

Income Summary

Sales

Advertising Expense

Insurance Expense

Miscellaneous Expense

Rent Expense

Supplies Expense

Utilities Expense

6

7

8

9

10

11

12

13

14

15

3 8 0 0 00

3 8 0 0 00

4 6 9 4 00

4 6 9 4 00

17 18

4 6 9 4 00

16

1 9 1 0 00

2 7 8 4 00

21

3 8 0 0 00

1 9 1 0 00

1 8 9 0 00

15

14

13

12

11

10

9

8

21

6 5 0 00

6

1 2 8 4 00

7

5

4

3

2

1

1 5 0 0 00

CREDIT

20

6 5 0 00

3 9 0 00

5 0 0 00

6 0 0 00

5 0 00

1 5 0 00

3 0 0 00

2 5 0 00

2 0 0 00

8 2 5 00

3 1 1 9 00

DEBIT

8

20

6 5 8 4 00

(a) 5 0 0 00

(b) 1 5 0 00

2 0 0 00

3 8 0 0 00

CREDIT

BALANCE SHEET

19

6 5 8 4 00

3 9 0 00

6 0 0 00

5 0 00

2 0 0 00

(b) 1 5 0 00

DEBIT

7

19

18

17

Net Income

Accts. Pay.—St. Croix Supp.

5

16

4 0 0 00

Prepaid Insurance

4

(a) 5 0 0 00

6

INCOME STATEMENT

5

8:54 AM

3 8 0 0 00

1 2 8 4 00

7 0 0 00

Supplies

3

4

CREDIT

ADJUSTMENTS DEBIT

3

10/30/07

3 0 0 00

1 5 0 0 00

8 2 5 00

Accts. Rec.—C. Gabriel

2

3 1 1 9 00

Cash

1

CREDIT

2

For Month Ended November 30, 20 – – TRIAL BALANCE DEBIT

1

Work Sheet

LawnPro Company

6-6

ACCOUNT TITLE

Completing a work sheet

BTE_Ch06-121-140.qxd Page 140

SECOND REVISED

CHALLENGE PROBLEM, p. 174

COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING

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