Module 2 Chapter 4 Exercise 4

Module 2 – Chapter 4: Exercise
Solve the following Questions:
1. Kirk Enterprises offers rug cleaning services to business clients. Below are the adjustments data for the year
ended July 31. Using this information along with the spreadsheet below, record the adjusting entries in proper
general journal form.
Adjustments:
(a) The equipment is estimated to last for five years with no salvage value. The asset will be depreciated
evenly over its useful life. Record one month’s depreciation.
(b) Accrued wages, $2.
(c) Unused supplies on hand, $8.
(d) Of the unearned revenue, 75% has been earned.
(e) Unexpired insurance remaining at the end of the month, $9.
Cash
Prepaid Insurance
Fees Receivable
Supplies
Equipment
Accumulated
Depreciation
Unearned Revenue
Accounts Payable
Wages Payable
Ruben Ramon, Capital
Ruben Ramon,
Drawing
Service Revenue
Advertising Expense
Wages Expense
Insurance Expense
Supplies Expense
Depreciation Expense
Kirk Enterprises
End-of-Period Spreadsheet
For the Year Ended July 31
Unadjusted
Trial Balance
Adjustments
Dr.
Cr.
Dr.
Cr.
36
12
56
12
60
12
Adjusted Trial
Balance
Dr.
Cr.
20
32
84
4
80
28
20
228
228
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2. Indicate whether each of the following would be reported in the section of financial statements identified as
(a) current asset, (b) property, plant, and equipment, (c) current liability, (d) revenue, or (e) expense:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Truck
Accumulated Depreciation
Telephone Expense
Fees Earned
Wages Payable
Prepaid Insurance
Office Supplies
Dining Expense
Unearned Rent
3. The following are all the steps in the accounting cycle. List them in the order in which they should be done.
– Closing entries are journalized and posted to the ledger.
– An unadjusted trial balance is prepared.
– An optional end-of-period spreadsheet (work sheet) is prepared.
– A post-closing trial balance is prepared.
– Adjusting entries are journalized and posted to the ledger.
– Transactions are analyzed and recorded in the journal.
– Adjustment data are assembled and analyzed.
– Financial statements are prepared.
– An adjusted trial balance is prepared.
– Transactions are posted to the ledger.
4. 82. Identify which of the following accounts should be closed with a debit or a credit at the end of the fiscal year. If it
is not closed, mark as n/a.
1. Utilities Payable
2. Utilities Expense
3. Supplies
4. Supplies Expense
5. Fees Earned
6. Unearned Fees
7. Accounts Receivable
8. Jason Hill, Drawing
9. Jason Hill, Capital
10. Accumulated Depreciation—Equipment
11. Depreciation Expense—Equipment
12. Equipment
13. Prepaid Insurance
14. Insurance Expense
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