
Concept explainers
Completing the accounting cycle from
On December 1, Bob Wonder began an auto repair shop, Wonder’s Quality Automotive. The following transactions occurred during December:
Dec. 1 | Wonder contributed $55,000 cash to the business in exchange for shares of common stock. |
1 | Purchased $9,000 of equipment paying cash. |
1 | Paid $1,000 for a four-month insurance policy starting on December 1. |
9 | Paid $16,000 cash to purchase land to be used in operations. |
10 | Purchased office supplies on account, $2,900. |
19 | Borrowed $30,000 from the bank for business use. Wonder signed a note payable to the bank in t he name of the corporation. The note is due in five years. |
22 | Paid $1,200 for advertising expenses. |
26 | Paid $500 on account. |
28 | The business received a bill for utilities to be paid in January, $230. |
31 | Revenues earned during the month included $20,500 cash and $3,300 on account. |
31 | Paid employees' salaries $3,100 and building rent $1,000. Record as a compound entry. |
31 | The business received $1,050 for auto screening services to be performed next month. |
31 | Cash dividends of $3,500 were paid to stockholders. |
The business uses the following accounts: Cash;
Adjustment data:
a. Office Supplies used during the month, $900.
b. Depreciation for the month, $ 150.
c. One month insurance has expired.
d. Accrued Interest Expense, $75.
Requirements
1. Prepare the journal entries, and post to the T-accounts.
2. Prepare an unadjusted trial balance.
3. Complete the worksheet for the month ended December 31, 2016. (optional)
4. Prepare the
5. Prepare an adjusted trial balance.
6. Prepare the income statement, the statement of retained earnings, and the classified
7. Prepare the closing entries, and post to the T-accounts.
8. Prepare a post-dosing trial balance.

Want to see the full answer?
Check out a sample textbook solution
Chapter 4 Solutions
Horngren's Financial & Managerial Accounting (5th Edition)
- Dont use ai solution general Accounting questionarrow_forwardNeed correct answer general Accountingarrow_forwardYear 0123 Cash Flow -$ 19,000 11,300 10,200 6,700 a. What is the profitability index for the set of cash flows if the relevant discount rate is 11 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. b. What is the profitability index for the set of cash flows if the relevant discount rate is 16 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. c. What is the profitability index for the set of cash flows if the relevant discount rate is 23 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. a. Profitability index b. Profitability index c. Profitability indexarrow_forward
- Sol This question answerarrow_forwardRecently, Abercrombie & Fitch has been implementing a turnaround strategy since its sales had been falling for the past few years (11% decrease in 2014, 8% in 2015, and just 3% in 2016.) One part of Abercrombie's new strategy has been to abandon its logo-adorned merchandise, replacing it with a subtler look. Abercrombie wrote down $20.6 million of inventory, including logo-adorned merchandise, during the year ending January 30, 2016. Some of this inventory dated back to late 2013. The write-down was net of the amount it would be able to recover selling the inventory at a discount. The write-down is significant; Abercrombie's reported net income after this write-down was $35.6 million. Interestingly, Abercrombie excluded the inventory write-down from its non-GAAP income measures presented to investors; GAAP earnings were also included in the same report. Question: What is the impact on Abercrombie & Fitch's financial statements from the write-down of its logo-adorned merchandise…arrow_forwardTherefore the final answerarrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeFinancial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
- College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub

