Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver

Exercise 3

Completing the accounting cycle
The trial balance of Racer Internet, Inc., at March 31, 2012, follows:

Adjusting data at March 31, 2012:
a. Unearned service revenue still unearned, $500.
b. Prepaid rent still in force, $2,000.
c. Supplies used during the month, $800.
d. Depreciation for the month, $400.
e. Accrued salary expense, $600.
Requirements
1. Journalize adjusting journal entries.
2. Enter the trial balance on a worksheet and complete the worksheet of Racer Internet.
3. Prepare the income statement, statement of retained earnings, and classified balance sheet in report form.
4. Using the worksheet data that you prepared, journalize the closing entries, and post the adjusting and closing entries to T-accounts. Use dates and show the ending balance of each account.
5. Prepare a post-closing trial balance.
6. Calculate the current and debt ratios for the'company.