From the following Company R adjusted trial balance, prepare the following:

E. Post-Closing Trial Balance

$$\begin{array}{c} \textbf{Adjusted Trial Balance} \end{array}$$

$$\begin{array}{lcc} &\textbf{Debit}&\textbf{Credit}\\[5pt] \text{Cash}&\text{\$\hspace{5pt}44,000}\\ \text{Accounts Receivable}&\text{\hspace{10pt}13,800}\\ \text{Prepaid Insurance}&\text{\hspace{15pt}6,400}\\ \text{Land}&\text{\hspace{10pt}16,000}\\ \text{Accounts Payable}&&\text{\$\hspace{5pt}14,900}\\ \text{Salaries Payable}&&\text{\hspace{15pt}4,500}\\ \text{Common Stock}&&\text{\hspace{10pt}31,000}\\ \text{Retained Earnings}&&\text{\hspace{10pt}10,200}\\ \text{Dividends}&\text{\hspace{10pt}12,000}\\ \text{Service Revenue}&&\text{\hspace{10pt}86,000}\\ \text{Insurance Expense}&\text{\hspace{15pt}7,600}\\ \text{Salaries Expense}&\text{\hspace{10pt}32,000}\\ \text{Miscellaneous Expense}&\underline{\text{\hspace{10pt}14,800}}&\underline{\text{\hspace{39pt}}}\\ &\underline{\underline{\text{\$\hspace{1pt}146,600}}}&\underline{\underline{\text{\$\hspace{1pt}146,600}}}\\ \end{array}$$

Ken Jones, an architect, opened an office on April 1, 2016. During the month, he completed the following transactions connected with his professional practice: a. Transferred cash from a personal bank account to an account to be used for the business, $\$ 18,000$. b. Purchased used automobile for $\$ 19,500$, paying $\$ 2,500$ cash and giving a note payable for the remainder. c. Paid April rent for office and workroom, $3,150, d. Paid cash for supplies,$\$1,450$. e. Purchased office and computer equipment on account, $\$ 6,500$. f. Paid cash for annual insurance policies on automobile and equipment, $\$ 2,400$. g. Received cash from a client for plans delivered, $\$ 12,000$. h. Paid cash to creditors on account, $\$ 1,800$. i. Paid cash for miscellaneous expenses, $\$ 375$. j. Received invoice for blueprint service, due in May, $\$ 2,500$. k. Recorded fees earned on plans delivered, payment to be received in May, $\$ 15,650$.

1. Paid salary of assistant, $\$ 2,800$. m. Paid cash for miscellaneous expenses, $\$ 200$. n. Paid installment due on note payable, $\$ 300$. o. Paid gas, oil, and repairs on automobile for April, $\$ 550$. Instructions
2. Record these transactions directly in the following $\mathrm{T}$ accounts, without journalizing: Cash; Accounts Receivable; Supplies; Prepaid Insurance; Automobiles; Equipment; Notes Payable; Accounts Payable; Ken Jones, Capital; Professional Fees; Rent Expense; Salary Expense; Blueprint Expense; Automobile Expense; Miscellaneous Expense. To the left of each amount entered in the accounts, place the appropriate letter to identify the transaction.
3. Determine account balances of the $T$ accounts. Accounts containing a single entry only (such as Prepaid Insurance) do not need a balance.
4. Prepare an unadjusted trial balance for Ken Jones, Architect, as of April 30, 2016.
5. Determine the net income or net loss for April.

Amy Austin established an insurance agency on March 1 of the current year and completed the following transactions during March:

a. Opened a business bank account with a deposit of $\$ 50,000$ from personal funds.
b. Purchased supplies on account, $\$ 4,000$.
c. Paid creditors on account, $\$ 2,300$.
d. Received cash from fees earned on insurance commissions, $\$ 13,800$.
e. Paid rent on office and equipment for the month, $\$ 5,000$.
f. Paid automobile expenses for the month, $\$ 1,150$, and miscellaneous expenses, $\$ 300$.
g. Paid office salaries, $\$ 2,500$.
h. Determined that the cost of supplies on hand was $\$ 2,700$; therefore, the cost of supplies used was $\$ 1,300$.
i. Billed insurance companies for sales commissions earned, $\$ 12,500$.
j. Withdrew cash for personal use, $\$ 3,900$.

Instructions

1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings:

$$\begin{array}{c} \begin{array}{ccc} \begin{array}{ccccc} && \text{Assets}\\ \hline && \text{Accounts}\\ \text{Cash} & + & \text{Receivable} & + & \text{Supplies} \end{array} & \begin{array}{c} =\\ \\ = \end{array} & \begin{array}{ccccccccccccccccc} \text{Liabilities} & + &&&&&&& \text{Owner’s Equity}\\ \hline \text {Accounts} && \text {Amy Austin,} && \text {Amy Austin,} && \text {Fees} && \text {Rent } && \text { Salaries} && \text {Supplies } && \text { Auto } && \text { Misc. } \\ \text { Payable } & + & \text { Capital } & - & \text { Drawing } & + & \text { Earned} & - & \text {Expense} & - & \text {Expense} & - & \text {Expense} & - & \text {Expense} & - & \text {Expense } \\ \end{array} \end{array} \end{array}$$

2. Briefly explain why the owner's investment and revenues increased owner's equity, while withdrawals and expenses decreased owner's equity.
3. Determine the net income for March.
4. How much did March's transactions increase or decrease Amy Austin's capital?

Direct labor hours are estimated as 2,000 in Quarter 1; 2,100 in Quarter 2; 1,900 in Quarter 3; and 2,300 in Quarter 4. Prepare a manufacturing overhead budget using the information provided.

$$\begin{array}{lrlr} \text { Indirect material per hour } & \$ 1.00 & \text { Supervisory salaries } & \$ 17,000 \\ \text { Indirect labor per hour } & 1.25 & \text { Maintenance } & 5,000 \\ \text { Maintenance per hour } & 0.25 & \text { Property taxes and insurance } & 6,000 \\ \text { Utilities per hour } & 0.50 & \text { Depreciation } & 3,500 \end{array}$$

Timberlake Company owns equipment with a cost of $165,000 and accumulated depreciation of$60,000 that can be sold for $82,000 less a 6% sales commission. Alternatively, Timberlake Company can lease the equipment to another company for five years for a total of$84,600, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Timberlake Company on the equipment would total $7,950 over the five years. Prepare a differential analysis on March 23 as to whether Timberlake Company should lease (Alternative 1) or sell (Alternative 2) the equipment.

From the following Company S adjusted trial balance, prepare the following:

B. Retained Earnings Statement

$$\begin{array}{c} \textbf{Adjusted Trial Balance} \end{array}$$

$$\begin{array}{lcc} &\textbf{Debit}&\textbf{Credit}\\[5pt] \text{Cash}&\text{\$\hspace{5pt}55,200}\\ \text{Accounts Receivable}&\text{\hspace{10pt}30,200}\\ \text{Prepaid Insurance}&\text{\hspace{15pt}6,000}\\ \text{Land}&\text{\hspace{10pt}30,000}\\ \text{Accounts Payable}&&\text{\$\hspace{5pt}14,300}\\ \text{Salaries Payable}&&\text{\hspace{15pt}6,100}\\ \text{Common Stock}&&\text{\hspace{10pt}26,000}\\ \text{Retained Earnings}&&\text{\hspace{10pt}38,900}\\ \text{Dividends}&\text{\hspace{10pt}16,500}\\ \text{Service Revenue}&&\text{\hspace{5pt}211,850}\\ \text{Insurance Expense}&\text{\hspace{10pt}24,000}\\ \text{Salaries Expense}&\text{\hspace{5pt}128,350}\\ \text{Miscellaneous Expense}&\underline{\text{\hspace{15pt}6,900}}&\underline{\text{\hspace{39pt}}}\\ &\underline{\underline{\text{\$\hspace{1pt}297,150}}}&\underline{\underline{\text{\$\hspace{1pt}297,150}}}\\ \end{array}$$

The following revenue and expense account balances were taken from the ledger of Wholistic Health Services Co. after the accounts had been adjusted on February 28, 2019, the end of the fiscal year:

$$\begin{array}{lrlr}\text { Depreciation Expense } & \$ 7,500 & \text { Service Revenue } & \$ 448,400 \\ \text { Insurance Expense } & 3,000 & \text { Supplies Expense } & 2,750 \\ \text { Miscellaneous Expense } & 8,150 & \text { Utilities Expense } & 33,900 \\ \text { Rent Expense } & 54,000 & \text { Wages Expense } & 360,000\end{array}$$

Prepare an income statement.

The following revenue and expense account balances were taken from the ledger of Veggie Health Services Co. after the accounts had been adjusted on February 28, 2014, the end of the current fiscal year:

$$\begin{array}{lrlr} \text { Depreciation Expense } & \$ 9,000 & \text { Service Revenue } & \$ 270,900 \\ \text { Insurance Expense } & 4,000 & \text { Supplies Expense } & 3,000 \\ \text { Miscellaneous Expense } & 6,000 & \text { Utilities Expense } & 17,600 \\ \text { Rent Expense } & 42,000 & \text { Wages Expense } & 213,100 \end{array}$$

Prepare an income statement.

Velcor Industries has over 70 expense accounts in its chart of accounts. Each month, the computerized accounting system generates a list of the accounts which includes the year-to-date account balance and the annual amount budgeted for the year.

The managers of the business want to receive a monthly report showing how effectively the business is controlling its expenses. For example, if the company expected to spend $12,000 on insurance for the entire year, it should only have spent$5,000 through May.

OPEN THE SPREADSHEET TLA CH04

1. Follow the directions on the Instructions tab.

Rapid Delivery, Inc. is considering the purchase of an additional delivery vehicle for $\$ 38,000$ on January $1$, $2010$. The truck is expected to have a five-year life with an expected residual value of $\$ 5,000$ at the end of five years. The expected additional revenues from the added delivery capacity are anticipated to be $\$ 60,000$ per year for each of the next five years. A driver will cost $\$ 43,000$ in $2010$ , with an expected annual salary increase of $\$ 2,000$ for each year thereafter. The insurance for the truck is estimated to cost $\$ 4,000$ per year.

Is the additional truck a good investment based on your analysis?

Presented below is information related to Gonzales Corporation for the month of January 2017.

$$\begin{array}{lrclr} \text{Cost of goods sold}&\text{\$\hspace{5pt}208,000 }&&\text{Salaries and wages expense}&\text{\$\hspace{10pt}61,000}\\ \text{Delivery expense}&\text{7,000 }&&\text{Sales discounts}&\text{8,000}\\ \text{Insurance expense}&\text{12,000}&&\text{Sales returns and allowances}&\text{13,000}\\ \text{Rent expense}&\text{20,000}&&\text{Sales revenue}&\text{350,000}\\ \end{array}$$

Prepare the necessary closing entries.

List the errors you find in the following balance sheet. Prepare a corrected balance sheet.

$$\begin{array}{lrlr} \text { Accounts Payable } & \$ 18,500 & \text { Prepaid Insurance } & \$ 19,200 \\ \text { Accounts Receivable } & 78,250 & \text { Prepaid Rent } & 18,000 \\ \text { Accumulated Depreciation-Equipment } & 103,300 & \text { Retained Earnings } & 509,000 \\ \text { Capital Stock } & 100,000 & \text { Salaries Payable } & 8,500 \\ \text { Cash } & ? & \text { Supplies } & 5,350 \\ \text { Equipment } & 300,000 & \text { Unearned Fees } & 9,000 \\ \text { Land } & 290,000 & & \end{array}$$

A physician performs medical services for a patient on October 20; the total bill for the medical services was $200. The patient makes a co-pay of$20 on October 20, and the insurance company pays the remaining balance of $180 on November 19. On what date(s) will the physician record the revenue for those medical services provided on October 20?

a.$200 of revenue on October 20 b. $20 of revenue on October 20 and$180 of revenue on November 19 c. $200 of revenue on November 19 d.$180 of revenue on October 20 and the remaining $20 on November 19

Ramel Corporation's unadjusted trial balance and accounting forms are given in the Working Papers.

Instructions:

13. Journalize the reversing entries using page 17 of a general journal.

Adjustment Information, December 31

Estimated uncollectible accounts based on aging accounts receivable         $ 11,020.00
Accrued interest income                                                          160.00
Merchandise inventory                                                        581,489.16 
Supplies inventory                                                               620.01
Value of prepaid insurance                                                     4,000.00
Annual depreciation expense-office equipment                                  10,960.00 
Annual depreciation expense-store equipment                                   10,120.00
Accrued interest expense                                                         625.00
Prepaid rent income earned                                                     6,000.00