Question 1

During the year, Able Co. purchased $23,750 worth of supplies, at the end of the year, the supplies expense on the adjusted trial balance was $29,340 and the balance sheet showed a balance of $810 in the supplies account. What was the supplies balance at the beginning of the year?

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Question 2

Calculate the current ratio in each of the following separate cases.
 $$\begin{array} { | l | r | r | } 
\hline & \text { Current Assets } & \text { Current Liabilities } \
\hline \text { Case 1 } & \$ 75,000 & \$ 30,000 \
\hline \text { Case 2 } & \$ 161,500 & \$ 85,000 \
\hline \text { Case 3 } & \$ 45,000 & \$ 53,000 \
\hline \text { Case 4 } & \$ 132,000 & \$ 127,000 \
\hline \text { Case 5 } & \$ 99,000 & \$ 110,000 \
\hline
\end{array}$$

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Question 3

Nike's net income was $780,000; its net assets were $5,200,000; and its net sales were $9,000,000. Calculate its profit margin ratio.

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Question 4

On December 31, 2009, a company forgot to record $7,000 of depreciation on office equipment. What would be the effect on the assets, net income and equity when it comes to the 2009 financial statements?

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Question 5

What is the purpose of a post-closing trial balance?

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Question 6

What is the purpose of closing entries? Describe the closing process.

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Question 7

A company has 20 employees who each earn $500 per week for a 5-day week that begins on Monday. December 31 of 2011 is a Monday and all 20 employees worked that day.
a. Prepare the required adjusting journal entry to record accrued salaries on December 31, 2011.
b. Prepare the journal entry to record the payment of salaries on January 4, 2012.

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Question 8

The following information is available for the Wooden Company:
$$\begin{array} { | l | r | r | r | } 
\hline & 2010 & 2009 & 2008 \
\hline \text { Net income } & \$ 2,630 & \$ 2,100 & \$ 1,850 \
\hline \text { Net Sales } & 36,500 & 32,850 & 31,200 \
\hline \text { Total assets } & 400,000 & 385,000 & 350,000 \
\hline
\end{array}$$
From the information provided, calculate Wooden's profit margin ratio for each of the three years. Comment on the results, assuming that the industry average for the profit margin ratio is 6% for each of the three years.

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Question 9

What are the types of adjusting entries used for accrued expenses and accrued revenues?

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Question 10

What are some of the steps that Ben Huh took to control CheezBurger Network costs?

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Question 11

Describe the two alternate methods used to account for prepaid expenses.

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Question 12

Describe the types of entries required in later periods that result from accruals.

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Question 13

What are the types of adjusting entries used for prepaid expenses, depreciation and unearned revenues?

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Question 14

Describe a worksheet and explain why it is useful.

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Question 15

List and explain the steps in preparing a 10-column worksheet.

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Question 16

What is the usual order in which financial statements are prepared from the adjusted trial balance? Why are they prepared in that order?

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Question 17

The calendar year-end adjusted trial balance for Acosta Co. follows:

Required:
a. Prepare a classified year-end balance sheet. (Note: A $7,000 installment on the long-term note payable is due within one year.)
b. Calculate the current ratio.

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Question 18

Reebok's net income was $180,000; its total assets were $1,050,000; and its net sales were $3,500,000. Calculate the company's profit margin ratio.

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Question 19

The following are the steps in the accounting cycle. List them in the order in which they are completed:
Prepare adjusted trial balance
Post transactions
Prepare an unadjusted trial balance
Journalize transactions
Prepare the financial statements
Close the temporary accounts
Adjust the ledger accounts
Prepare a post-closing trial balance
Analyze transactions

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Question 20

What is an adjusted trial balance? Why is it prepared?

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Quiz 3: Adjusting Accounts and Preparing Financial Statements