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Name Perfect YourScore Score
Analyzing Accounts Affected by Adjusting and Closing Entries 24 Pts.Examining Adjusting and Closing Entries 18 Pts.
Analyzing the Accounting Cycle for a Merchandising Business9 Pts.Organized as a Corporation
Total 51 Pts.
StudyGuide
16Part One—Analyzing Accounts Affected by Adjusting andClosing EntriesDirections: For each adjusting or closing entry described, decide which accountsare debited and credited. Print the letter identifying your choice in the properAnswers column.
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING Chapter 16 • 421
Accounts to Be
Debited Credited
T C
I K
R P
S Q
J L
E A
F B
G H
O I
I M
I N
N D
Account Title
A. AccumulatedDepreciation—OfficeEquipment
B. AccumulatedDepreciation—StoreEquipment
C. Allowance forUncollectible Accounts
D. Dividends
E. Depreciation Expense—Office Equipment
F. Depreciation Expense—Store Equipment
G. Federal Income TaxExpense
H. Federal Income TaxPayable
I. Income Summary
J. Insurance Expense
K. Merchandise Inventory
L. Prepaid Insurance
M. Purchases
N. Retained Earnings
O. Sales
P. Supplies—Office
Q. Supplies—Store
R. Supplies Expense—Office
S. Supplies Expense—Store
T. Uncollectible Accounts Expense
Transaction
1–2. Adjusting entry for allowance for uncollectibleaccounts. (p. 482)
3–4. Adjusting entry for a decrease in merchandiseinventory. (p. 482)
5–6. Adjusting entry for office supplies. (p. 483)
7–8. Adjusting entry for store supplies. (p. 483)
9–10. Adjusting entry for prepaid insurance. (p. 484)
11–12. Adjusting entry for depreciation of officeequipment. (p. 484)
13–14. Adjusting entry for depreciation of storeequipment. (p. 485)
15–16. Adjusting entry for federal income taxes. (p. 485)
17–18. Closing entry for the sales account. (p. 488)
19–20. Closing entry for the purchases account. (p. 490)
21–22. Closing entry for the income summary accountwith a net income. (p. 491)
23–24. Closing entry for dividends. (p. 491)
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422 • Working Papers TE CENTURY 21 ACCOUNTING, 9TH EDITION
Part Two—Examining Adjusting and Closing EntriesDirections: Place a T for True or an F for False in the Answers column toshow whether each of the following statements is true or false.
Answers
1. T
2. F
3. F
4. T
5. T
6. T
7. T
8. F
9. F
10. T
11. T
12. F
13. T
14. F
15. T
16. F
17. F
18. T
1. General ledger account balances are changed only by posting journal entries. (p. 481)
2. Adjusting entries bring subsidiary ledger accounts up to date. (p. 481)
3. Hobby Shack records the adjusting entries in the general journal on the next line followingthe last daily transaction. (p. 481)
4. Indicating a source document is not necessary when journalizing adjusting entries. (p. 481)
5. Temporary accounts are closed at the end of a fiscal period to prepare the general ledgerfor the next fiscal period. (p. 487)
6. Closing the temporary accounts at the end of a fiscal period is an application of theaccounting concept Matching Expenses with Revenue. (p. 487)
7. A temporary account is closed by recording an equal amount on the side opposite thebalance. (p. 487)
8. The Trial Balance columns of a work sheet and an income statement contain theinformation needed to journalize closing entries. (p. 487)
9. Permanent accounts are sometimes referred to as nominal accounts. (p. 487)
10. The ending account balances of permanent accounts for one fiscal period are the beginningaccount balances for the next fiscal period. (p. 487)
11. Contra accounts with credit balances are closed by debiting the accounts and creditingIncome Summary. (p. 488)
12. Expense accounts are closed by debiting the expense accounts and crediting IncomeSummary. (p. 489)
13. The Income Summary account is closed into the Retained Earnings account. (p. 491)
14. Dividends increase the earnings retained by a corporation. (p. 491)
15. After the closing entry for the Dividends account is posted, the Dividends account has azero balance. (p. 491)
16. After all closing entries are posted, the income statement accounts are the only generalledger accounts that have balances. (p. 494)
17. When the general ledger is ready for the next fiscal period, this is an application of theBusiness Entity accounting concept. (p. 494)
18. The purpose of the post-closing trial balance is to prove the general ledger equality ofdebits and credits. (p. 496)
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COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING Chapter 16 • 423
Name Date Class
Part Three—Analyzing the Accounting Cycle for a MerchandisingBusiness Organized as a CorporationDirections: Write a number from 1 to 9 to the left of each step to indicate the correct sequence ofall the steps in the accounting cycle. (p. 497)
Answers
1. 3
2. 1
3. 7
4. 2
5. 4
6. 9
7. 6
8. 8
9. 5
Post journal entries to the subsidiary ledgers and the general ledger.
Check source documents for accuracy, and analyze transactions into debit and credit parts.
Journalize adjusting and closing entries from the work sheet.
Record transactions in journals, using information on source documents.
Prepare the schedules of accounts payable and accounts receivable, using information fromthe subsidiary ledgers.
Prepare a post-closing trial balance of the general ledger.
Prepare financial statements from the work sheet.
Post adjusting and closing entries to the general ledger.
Prepare a work sheet, including a trial balance, from the general ledger.
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424 • Working Papers TE CENTURY 21 ACCOUNTING, 9TH EDITION
Making a Speech
You will often be responsible for making a speech or presentation while you are in school and after schoolas well. Many people fear speaking in front of others, but it is actually very easy if you are well prepared.
Choosing Your TopicYour topic must be of interest to your audience and one that you can cover adequately in the time available.A common error that students make is to pick a topic that is so broad that they cannot really cover the topicin a short speech. The result is that the speech may ramble and not make any real points. Another errorstudents sometimes make is that they use only one idea. In this case, they may simply make the same pointover and over.
Practicing Your TalkYou should always practice giving your speech before you actually make it before the group. Practicing willhelp you work out any rough spots, and it will make you feel much more at ease when you make the actualpresentation.
A good technique is to give the talk in front of a mirror. Watching yourself while speaking can be verydistracting, but it will give you valuable practice in keeping on the subject and avoiding distractions.
Your AppearanceOn the day you are to give your talk, be sure to be well rested, and be sure to dress appropriately. Whenyou are introduced, walk directly to the platform. Stand straight without slouching or leaning on the deskor lectern. A sloppy appearance will detract from your talk.
Giving Your SpeechIn most cases you should not read a speech. You should talk to the members of the audience, following theideas from notes that you have made.
When you begin your talk, start with a point that will gain the attention of the group. It is not necessaryto try to tell a joke. If you do not get the attention of the group at the outset, however, you may have troublemaintaining their interest.
Each point should be easy to understand, and you may illustrate it with examples that are clearly relatedand support the point. When you proceed to the next point, you should make it clear to the group that youare moving to the next item of interest.
A common error is to direct your talk to only one person in the audience, particularly someone whoagrees with your points. However, you are speaking to all members of the audience and you should lookat all of them.
After you have made your major points, you should summarize briefly. Your conclusions should bebased on the material that you have presented and should be easy to follow. Your talk should end on astrong note, and you should then stop. A common error is for a speaker to repeat the conclusion severaltimes, allowing the speech to end on a low note.
Keep on TimeKeep your speech to the allotted time. If you have 20 minutes, be sure that you do not take 25 minutes. Paceyourself so that you will finish all points on time. Do not go too slowly at first and then rush at the end.This can make your talk dull at the beginning and hard to follow at the end.
With proper planning and practice, you will soon be making excellent talks.
StudySkills
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Name Date Class
WORK TOGETHER, p. 48616-1
Journ
aliz
ing a
dju
stin
g e
ntr
ies
Chapter 16 Recording Adjusting and Closing Entries for a Corporation • 425
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WORK TOGETHER (continued)16-1
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING426 • Working Papers TE
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BTE_Ch16-425-465.qxd 11/9/07 9:05 PM Page 426 SECOND REVISED
Name Date Class
WORK TOGETHER (concluded)16-1
1.
Chapter 16 Recording Adjusting and Closing Entries for a Corporation • 427
GENERAL JOURNAL PAGE 18
DATE ACCOUNT TITLE DEBIT CREDITDOC.NO.
POST.REF.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
Dec.20 – –
31
31
31
31
31
31
31
31
Uncollectible Accounts Expense
Allowance for Uncollectible Accounts
Merchandise Inventory
Income Summary
Supplies Expense—Office
Supplies—Office
Supplies Expense—Store
Supplies—Store
Insurance Expense
Prepaid Insurance
Depreciation Expense—Office Equipment
Accumulated Depreciation—Office Equipment
Depreciation Expense—Store Equipment
Accumulated Depreciation—Store Equipment
Federal Income Tax Expense
Federal Income Tax Payable
1 5 0 0 00
1 8 4 8 25
1 4 4 8 55
3 2 4 8 11
11 0 0 0 00
3 4 1 0 00
6 4 2 0 00
3 9 4 8 91
1 5 0 0 00
1 8 4 8 25
1 4 4 8 55
3 2 4 8 11
11 0 0 0 00
3 4 1 0 00
6 4 2 0 00
3 9 4 8 91
Adjusting Entries
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ON YOUR OWN, p. 48616-1
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aliz
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COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING428 • Working Papers TE
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(Note: Work sheet is continued on next page.)
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Name Date Class
ON YOUR OWN (continued)16-1
Chapter 16 Recording Adjusting and Closing Entries for a Corporation • 429
12
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s D
isco
unt
Sale
s R
etur
ns a
nd A
llow
ance
s
Purc
hase
s
Purc
hase
s D
isco
unt
Purc
h. R
etur
ns a
nd A
llow
ance
s
Ad
vert
isin
g E
xpen
se
Cas
h Sh
ort a
nd O
ver
Cre
dit
Car
d F
ee E
xpen
se
Dep
r. Ex
p.—
Off
ice
Equi
pmen
t
Dep
r. E
xp.—
Stor
e Eq
uipm
ent
Insu
ranc
e E
xpen
se
Mis
cella
neou
s E
xpen
se
Payr
oll T
axes
Exp
ense
Ren
t Exp
ense
Sala
ry E
xpen
se
Supp
lies
Exp
ense
—O
ffic
e
Supp
lies
Exp
ense
—St
ore
Unc
olle
ctib
le A
ccou
nts
Exp
.
Uti
litie
s E
xpen
se
Fed
. Inc
ome
Tax
Exp
ense
Net
Inco
me
afte
r Fed
. Inc
ome
Tax
Stur
gis
Supp
ly, I
nc.
Wor
k Sh
eet
For
Yea
r E
nded
Dec
embe
r 31
, 20
– –
BTE_Ch16-425-465.qxd 11/9/07 9:05 PM Page 429 SECOND REVISED
ON YOUR OWN (concluded)16-1
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING430 • Working Papers TE
GENERAL JOURNAL PAGE 24
DATE ACCOUNT TITLE DEBIT CREDITDOC.NO.
POST.REF.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
Dec.20 – –
31
31
31
31
31
31
31
31
Uncollectible Accounts Expense
Allowance for Uncollectible Accounts
Income Summary
Merchandise Inventory
Supplies Expense—Office
Supplies—Office
Supplies Expense—Store
Supplies—Store
Insurance Expense
Prepaid Insurance
Depreciation Expense—Office Equipment
Accumulated Depreciation—Office Equipment
Depreciation Expense—Store Equipment
Accumulated Depreciation—Store Equipment
Federal Income Tax Expense
Federal Income Tax Payable
3 2 5 0 00
1 6 4 8 22
6 8 4 7 15
5 5 4 8 11
16 0 0 0 00
8 4 5 0 00
8 6 0 0 00
24 1 6 3 72
3 2 5 0 00
1 6 4 8 22
6 8 4 7 15
5 5 4 8 11
16 0 0 0 00
8 4 5 0 00
8 6 0 0 00
24 1 6 3 72
Adjusting Entries
1.
BTE_Ch16-425-465.qxd 11/9/07 9:05 PM Page 430 SECOND REVISED
Name Date Class
WORK TOGETHER, p. 49316-2
Journalizing closing entries
1.
Chapter 16 Recording Adjusting and Closing Entries for a Corporation • 431
GENERAL JOURNAL PAGE 19
DATE ACCOUNT TITLE DEBIT CREDITDOC.NO.
POST.REF.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
Dec.20 – –
31
31
31
31
Closing Entries
Sales
Purchases Discount
Purchases Ret. and Allow.
Income Summary
Income Summary
Sales Discount
Sales Returns and Allow.
Purchases
Advertising Expense
Cash Short and Over
Credit Card Fee Expense
Depr. Exp.—Office Equipment
Depr. Exp.—Store Equipment
Insurance Expense
Miscellaneous Expense
Payroll Taxes Expense
Rent Expense
Salary Expense
Supplies Expense—Office
Supplies Expense—Store
Uncollectible Accounts Expense
Utilities Expense
Federal Income Tax Expense
Income Summary
Retained Earnings
Retained Earnings
Dividends
430 5 2 1 58
3 4 5 25
5 5 4 8 74
364 9 8 0 63
73 2 8 3 19
16 0 0 0 00
436 4 1 5 57
2 1 5 00
4 1 5 3 28
174 4 8 1 20
6 0 0 0 00
4 84
5 1 4 8 25
3 4 1 0 00
6 4 2 0 00
11 0 0 0 00
4 1 5 0 00
8 7 4 5 25
12 0 0 0 00
97 4 5 8 84
1 4 4 8 55
3 2 4 8 11
1 5 0 0 00
5 6 4 8 40
19 9 4 8 91
73 2 8 3 19
16 0 0 0 00
BTE_Ch16-425-465.qxd 11/9/07 9:05 PM Page 431 SECOND REVISED
ON YOUR OWN, p. 49316-2
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING432 • Working Papers TE
Journalizing closing entries
1.
GENERAL JOURNAL PAGE 25
DATE ACCOUNT TITLE DEBIT CREDITDOC.NO.
POST.REF.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
Dec.20 – –
31
31
31
31
Sales
Purchases Discount
Purchases Ret. and Allow.
Income Summary
Income Summary
Sales Discount
Sales Returns and Allow.
Purchases
Advertising Expense
Cash Short and Over
Credit Card Fee Expense
Depr. Exp.—Office Equipment
Depr. Exp.—Store Equipment
Insurance Expense
Miscellaneous Expense
Payroll Taxes Expense
Rent Expense
Salary Expense
Supplies Expense—Office
Supplies Expense—Store
Uncollectible Accounts Expense
Utilities Expense
Federal Income Tax Expense
Income Summary
Retained Earnings
Retained Earnings
Dividends
998 1 4 8 15
7 1 5 4 25
6 4 4 8 94
851 1 5 4 74
158 9 4 8 38
36 0 0 0 00
1,011 7 5 1 34
1 2 4 8 22
6 4 8 8 95
442 5 1 8 25
15 0 0 0 00
5 25
18 4 8 7 15
8 4 5 0 00
8 6 0 0 00
16 0 0 0 00
9 4 8 0 00
18 4 8 6 69
24 0 0 0 00
183 0 0 0 00
6 8 4 7 15
5 5 4 8 11
3 2 5 0 00
9 5 8 1 25
74 1 6 3 72
158 9 4 8 38
36 0 0 0 00
Closing Entries
BTE_Ch16-425-465.qxd 11/9/07 9:05 PM Page 432 SECOND REVISED
Name Date Class
WORK TOGETHER, p. 49816-3
Preparing a post-closing trial balance
1.
Chapter 16 Recording Adjusting and Closing Entries for a Corporation • 433
Cash
Petty Cash
Accounts Receivable
Merchandise Inventory
Supplies—Office
Supplies—Store
Prepaid Insurance
Accounts Payable
Sales Tax Payable
Capital Stock
Retained Earnings
Totals
Visual Art Center
Post-Closing Trial Balance
December 31, 20 – –
CREDITDEBITACCOUNT TITLE
21 8 1 0 20
3 5 0 00
8 3 9 8 80
190 9 8 0 00
1 3 1 4 00
2 2 6 8 00
1 9 8 0 00
227 1 0 1 00
11 6 7 6 50
1 5 8 4 00
100 0 0 0 00
113 8 4 0 50
227 1 0 1 00
BTE_Ch16-425-465.qxd 11/9/07 9:05 PM Page 433 SECOND REVISED
ON YOUR OWN, p. 49816-3
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING434 • Working Papers TE
Cash
Petty Cash
Accounts Receivable
Allow. for Uncoll. Accts.
Merchandise Inventory
Supplies
Prepaid Insurance
Equipment
Acc. Depr.—Equipment
Accounts Payable
Federal Income Tax Payable
Sales Tax Payable
Dividends Payable
Capital Stock
Retained Earnings
Totals
Welding Supply
Post-Closing Trial Balance
December 31, 20 – –
CREDITDEBITACCOUNT TITLE
26 4 8 5 00
5 0 0 00
15 4 8 7 00
134 1 5 2 00
7 4 1 00
1 0 0 0 00
25 4 8 7 00
203 8 5 2 00
1 4 5 7 00
12 4 5 0 00
13 1 5 4 00
2 4 8 9 00
1 5 4 8 00
5 0 0 0 00
50 0 0 0 00
117 7 5 4 00
203 8 5 2 00
Preparing a post-closing trial balance
1.
BTE_Ch16-425-465.qxd 11/9/07 9:05 PM Page 434 SECOND REVISED
Name Date Class
APPLICATION PROBLEM, p. 50016-1
Chapter 16 Recording Adjusting and Closing Entries for a Corporation • 435
12
34
AC
CO
UN
T T
ITL
E
TR
IAL
BA
LA
NC
E
DE
BIT
CR
ED
IT
AD
JUS
TM
EN
TS
DE
BIT
CR
ED
IT
INC
OM
E S
TA
TE
ME
NT
DE
BIT
CR
ED
IT
BA
LA
NC
E S
HE
ET
DE
BIT
CR
ED
IT
56
78
1 2 3 4 5 6 7 8 9 10
11
12
13
14
26
27
28
29
30
31
32
1 2 3 4 5 6 7 8 9
10
11
12
13
14
26
27
28
29
30
31
32
164
85
00
40
000
414
83
15
248
75
230
61
48
28
51
74
85
140
00
00
384
58
25
414
78
50
120
00
00
14
54
85
42
15
48
284
83
525
94
815
174
80
00
234
50
00
199
48
80
170
02
463
668
74
220
(d)
21
54
25
(e)
14
58
00(d
) 2
15
425
(a)
58
18
66(b
) 4
84
804
(c) 12
00
000
(f)
64
80
00
(g)
76
50
00
(h)
36
60
23
21
54
25
14
54
85
42
15
48
284
83
525
668
74
220
164
85
00
40
000
414
83
15
246
59
805
32
962
32
681
20
00
00
384
58
25
414
78
50
120
00
00
24
06
15
239
60
00
311
00
00
199
48
80
36
60
23
170
02
463
Cas
h
Pett
y C
ash
Acc
ount
s R
ecei
vabl
e
Allo
w. f
or U
ncol
l. A
ccts
.
Mer
chan
dis
e In
vent
ory
Supp
lies—
Off
ice
Supp
lies—
Stor
e
Prep
aid
Insu
ranc
e
Off
ice
Equ
ipm
ent
Acc
. Dep
r.—
Off
ice
Equi
pmen
t
Stor
e E
quip
men
t
Acc
. Dep
r.—
Stor
e Eq
uipm
ent
Acc
ount
s Pa
yabl
e
Fed
eral
Inco
me
Tax
Pay
able
Ret
aine
d E
arni
ngs
Div
iden
ds
Inco
me
Sum
mar
y
Sale
s
Sale
s D
isco
unt
Sale
s R
etur
ns a
nd A
llow
.
Purc
hase
s
h
Cel
lar
Boo
ks, I
nc.
Wor
k Sh
eet
For
Yea
r E
nded
Dec
embe
r 31
, 20
– –
Journ
aliz
ing a
dju
stin
g e
ntr
ies
(Note: Work sheet is continued on next page.)
BTE_Ch16-425-465.qxd 11/9/07 9:05 PM Page 435 SECOND REVISED
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING436 • Working Papers TE
APPLICATION PROBLEM (continued)16-1
12
34
AC
CO
UN
T T
ITL
E
TR
IAL
BA
LA
NC
E
DE
BIT
CR
ED
IT
AD
JUS
TM
EN
TS
DE
BIT
CR
ED
IT
INC
OM
E S
TA
TE
ME
NT
DE
BIT
CR
ED
IT
BA
LA
NC
E S
HE
ET
DE
BIT
CR
ED
IT
56
78
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
33
34
35
36
37
38
39
40 41
42
43
44
45
46
47
48
49
50 51 52
125
40
00
808
94
81
10
54
10
00
158
41
20
180
00
00
174
96
033
45
48
20
200
00
00
975
67
482
24
18
81
41
58
41
975
67
482
(f)
64
80
00(g
) 7
65
000
(c) 12
00
000
(a)
58
18
66(b
) 4
84
804
(e)
14
58
00
(h)
36
60
23
440
69
1844
06
918
125
40
00
808
94
81
10
64
80
00
76
50
00
120
00
00
54
10
00
158
41
20
180
00
00
174
96
033
58
18
66
48
48
04
14
58
00
45
48
20
236
60
23
595
36
367
799
55
75
675
31
942
24
18
81
41
58
41
675
31
942
675
31
942
399
55
938
399
55
938
319
60
363
799
55
75
399
55
938
Purc
hase
s D
isco
unt
Purc
h. R
etur
ns a
nd A
llow
.
Ad
vert
isin
g E
xpen
se
Cas
h Sh
ort a
nd O
ver
Cre
dit
Car
d F
ee E
xpen
se
Dep
r. E
xp. —
Off
ice
Equ
ip.
Dep
r. E
xp. —
Stor
e E
quip
.
Insu
ranc
e E
xpen
se
Mis
cella
neou
s E
xpen
se
Payr
oll T
axes
Exp
ense
Ren
t Exp
ense
Sala
ry E
xpen
se
Supp
lies
Exp
ense
—O
ffic
e
Supp
lies
Exp
ense
—St
ore
Unc
olle
ctib
le A
ccou
nts
Exp
.
Uti
litie
s E
xpen
se
Fed
. Inc
ome
Tax
Exp
ense
Net
Inco
me
afte
r Fed
. Inc
ome
Tax
Cel
lar
Boo
ks, I
nc.
Wor
k Sh
eet
For
Yea
r E
nded
Dec
embe
r 31
, 20
– –
BTE_Ch16-425-465.qxd 11/9/07 9:05 PM Page 436 SECOND REVISED
Name Date Class
APPLICATION PROBLEM (concluded)16-1
1.
Chapter 16 Recording Adjusting and Closing Entries for a Corporation • 437
GENERAL JOURNAL PAGE 22
DATE ACCOUNT TITLE DEBIT CREDITDOC.NO.
POST.REF.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
Dec.20 – –
31
31
31
31
31
31
31
31
Uncollectible Accounts Expense
Allowance for Uncoll. Acounts
Income Summary
Merchandise Inventory
Supplies Expense—Office
Supplies—Office
Supplies Expense—Store
Supplies—Store
Insurance Expense
Prepaid Insurance
Depreciation Exp. —Office Equipment
Accum. Depr. —Office Equipment
Depreciation Exp. —Store Equipment
Accum. Depr. —Store Equipment
Federal Income Tax Expense
Federal Income Tax Payable
1 4 5 8 00
2 1 5 4 25
5 8 1 8 66
4 8 4 8 04
12 0 0 0 00
6 4 8 0 00
7 6 5 0 00
3 6 6 0 23
1 4 5 8 00
2 1 5 4 25
5 8 1 8 66
4 8 4 8 04
12 0 0 0 00
6 4 8 0 00
7 6 5 0 00
3 6 6 0 23
Adjusting Entries
BTE_Ch16-425-465.qxd 11/9/07 9:05 PM Page 437 SECOND REVISED
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING438 • Working Papers TE
APPLICATION PROBLEM, p. 50016-2
Journalizing closing entries
1., 2., 3., 4.
GENERAL JOURNAL PAGE 23
DATE ACCOUNT TITLE DEBIT CREDITDOC.NO.
POST.REF.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
Dec.20 – –
31
31
31
31
Sales
Purchases Discount
Purchases Ret. and Allow.
Income Summary
Income Summary
Sales Discount
Sales Returns and Allow.
Purchases
Advertising Expense
Cash Short and Over
Credit Card Fee Expense
Depr. Exp.—Office Equipment
Depr. Exp.—Store Equipment
Insurance Expense
Miscellaneous Expense
Payroll Taxes Expense
Rent Expense
Salary Expense
Supplies Expense—Office
Supplies Expense—Store
Uncollectible Accounts Expense
Utilities Expense
Federal Income Tax Expense
Income Summary
Retained Earnings
Retained Earnings
Dividends
668 7 4 2 20
2 4 1 8 81
4 1 5 8 41
593 2 0 9 42
79 9 5 5 75
12 0 0 0 00
675 3 1 9 42
1 4 5 4 85
4 2 1 5 48
284 8 3 5 25
12 5 4 0 00
8 08
9 4 8 1 10
6 4 8 0 00
7 6 5 0 00
12 0 0 0 00
5 4 1 0 00
15 8 4 1 20
18 0 0 0 00
174 9 6 0 33
5 8 1 8 66
4 8 4 8 04
1 4 5 8 00
4 5 4 8 20
23 6 6 0 23
79 9 5 5 75
12 0 0 0 00
Closing Entries
BTE_Ch16-425-465.qxd 11/9/07 9:05 PM Page 438 SECOND REVISED
Name Date Class
APPLICATION PROBLEM, p. 50016-3
Preparing a post-closing trial balance
1.
Chapter 16 Recording Adjusting and Closing Entries for a Corporation • 439
Cash
Petty Cash
Accounts Receivable
Allow. for Uncoll. Accts.
Merchandise Inventory
Supplies—Office
Supplies—Store
Prepaid Insurance
Office Equipment
Acc. Depr.—Office Equipment
Store Equipment
Acc. Depr.—Store Equipment
Accounts Payable
Federal Income Tax Payable
Employee Income Tax Payable
Social Security Tax Payable
Medicare Tax Payable
Sales Tax Payable
Unemployment Tax Payable—Federal
Unemployment Tax Payable—State
Health Insurance Premiums Payable
U.S. Savings Bonds Payable
United Way Donations Payable
Dividends Payable
Capital Stock
Retained Earnings
Totals
Cellar Books, Inc.
Post-Closing Trial Balance
December 31, 20 – –
CREDITDEBITACCOUNT TITLE
16 4 8 5 00
4 0 0 00
41 4 8 3 15
246 5 9 8 05
3 2 9 62
3 2 6 81
2 0 0 0 00
38 4 5 8 25
41 4 7 8 50
387 5 5 9 38
2 4 0 6 15
23 9 6 0 00
31 1 0 0 00
19 9 4 8 80
3 6 6 0 23
1 2 4 8 20
9 0 3 96
2 1 1 41
2 4 5 8 25
2 8 00
1 8 9 00
4 0 0 00
2 5 00
4 0 00
3 0 0 0 00
60 0 0 0 00
237 9 8 0 38
387 5 5 9 38
BTE_Ch16-425-465.qxd 11/9/07 9:05 PM Page 439 SECOND REVISED
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING440 • Working Papers TE
APPLICATION PROBLEM, pp. 501, 50216-4
Journalizing and posting adjusting and closing entries; preparing a post-closing trial balance
1., 2.
GENERAL JOURNAL PAGE 22
DATE ACCOUNT TITLE DEBIT CREDITDOC.NO.
POST.REF.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Dec.20 – –
31
31
31
31
31
31
31
31
Uncollectible Accounts Expense
Allowance for Uncoll. Accounts
Merchandise Inventory
Income Summary
Supplies Expense—Office
Supplies—Office
Supplies Expense—Store
Supplies—Store
Insurance Expense
Prepaid Insurance
Depreciation Exp. —Office Equipment
Accum. Depr. —Office Equipment
Depreciation Exp. —Store Equipment
Accum. Depr. —Store Equipment
Federal Income Tax Expense
Federal Income Tax Payable
3 5 6 0 00
1 4 8 3 60
5 8 4 7 10
4 9 1 8 50
7 2 0 0 00
3 5 8 0 00
6 1 4 0 00
1 3 5 6 14
3 5 6 0 00
1 4 8 3 60
5 8 4 7 10
4 9 1 8 50
7 2 0 0 00
3 5 8 0 00
6 1 4 0 00
1 3 5 6 14
6165
1135
1140
3140
6155
1145
6160
1150
6130
1160
6120
1210
6125
1220
7105
2120
Adjusting Entries
BTE_Ch16-425-465.qxd 11/9/07 9:05 PM Page 440 SECOND REVISED
Name Date Class
APPLICATION PROBLEM (continued)16-4
3., 4.
Chapter 16 Recording Adjusting and Closing Entries for a Corporation • 441
GENERAL JOURNAL PAGE 23
DATE ACCOUNT TITLE DEBIT CREDITDOC.NO.
POST.REF.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
Dec.20 – –
31
31
31
31
Sales
Purchases Discount
Purchases Ret. and Allow.
Income Summary
Income Summary
Sales Discount
Sales Returns and Allow.
Purchases
Advertising Expense
Cash Short and Over
Credit Card Fee Expense
Depr. Exp.—Office Equipment
Depr. Exp.—Store Equipment
Insurance Expense
Miscellaneous Expense
Payroll Taxes Expense
Rent Expense
Salary Expense
Supplies Expense—Office
Supplies Expense—Store
Uncollectible Accounts Expense
Utilities Expense
Federal Income Tax Expense
Income Summary
Retained Earnings
Retained Earnings
Dividends
724 1 8 3 99
3 4 1 8 47
4 6 8 4 69
641 7 7 7 81
91 9 9 2 94
20 0 0 0 00
732 2 8 7 15
1 6 9 4 48
4 1 8 9 64
331 8 0 5 18
14 5 1 8 00
4 60
12 1 8 0 00
3 5 8 0 00
6 1 4 0 00
7 2 0 0 00
6 4 8 1 00
14 1 8 4 60
20 1 5 0 00
168 4 8 3 60
5 8 4 7 10
4 9 1 8 50
3 5 6 0 00
5 4 8 4 97
31 3 5 6 14
91 9 9 2 94
20 0 0 0 00
4110
5120
5130
3140
3140
4120
4130
5110
6105
6110
6115
6120
6125
6130
6135
6140
6145
6150
6155
6160
6165
6170
7105
3140
3120
3120
3130
Closing Entries
BTE_Ch16-425-465.qxd 11/9/07 9:05 PM Page 441 SECOND REVISED
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING442 • Working Papers TE
APPLICATION PROBLEM (continued)16-4
2., 4. GENERAL LEDGER
ACCOUNT NO. 1110
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 15 4 8 2 00
POST.REF.
✔20 – –
ACCOUNT Cash
DEBIT CREDIT
ACCOUNT NO. 1120
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 5 0 0 00
POST.REF.
✔20 – –
ACCOUNT Petty Cash
DEBIT CREDIT
ACCOUNT NO. 1130
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 42 1 5 8 80
POST.REF.
✔20 – –
ACCOUNT Accounts Receivable
DEBIT CREDIT
ACCOUNT NO. 1135
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
3 5 6 0 00
6 8 4 20
4 2 4 4 20
POST.REF.
✔
G22
20 – –
ACCOUNT Allow. for Uncoll. Accts.
DEBIT CREDIT
ACCOUNT NO. 1140
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
1 4 8 3 60
274 5 3 5 33
276 0 1 8 93
POST.REF.
✔
G22
20 – –
ACCOUNT Merchandise Inventory
DEBIT CREDIT
BTE_Ch16-425-465.qxd 11/9/07 9:05 PM Page 442 SECOND REVISED
Name Date Class
APPLICATION PROBLEM (continued)16-4
Chapter 16 Recording Adjusting and Closing Entries for a Corporation • 443
ACCOUNT NO. 1145
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
5 8 4 7 10
6 1 5 8 84
3 1 1 74
POST.REF.
✔
G22
20 – –
ACCOUNT Supplies—Office
DEBIT CREDIT
ACCOUNT NO. 1150
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
4 9 1 8 50
5 5 4 8 55
6 3 0 05
POST.REF.
✔
G22
20 – –
ACCOUNT Supplies—Store
DEBIT CREDIT
ACCOUNT NO. 1160
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
7 2 0 0 00
8 0 0 0 00
8 0 0 00
POST.REF.
✔
G22
20 – –
ACCOUNT Prepaid Insurance
DEBIT CREDIT
ACCOUNT NO. 1205
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 22 1 5 8 66
POST.REF.
✔20 – –
ACCOUNT Office Equipment
DEBIT CREDIT
ACCOUNT NO. 1210
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
3 5 8 0 00
4 8 4 8 00
8 4 2 8 00
POST.REF.
✔
G22
20 – –
ACCOUNT Acc. Depr. —Office Equipment
DEBIT CREDIT
ACCOUNT NO. 1215
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 34 1 5 8 11
POST.REF.
✔20 – –
ACCOUNT Store Equipment
DEBIT CREDIT
BTE_Ch16-425-465.qxd 11/9/07 9:05 PM Page 443 SECOND REVISED
APPLICATION PROBLEM (continued)16-4
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING444 • Working Papers TE
ACCOUNT NO. 1220
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
6 1 4 0 00
12 4 8 0 00
18 6 2 0 00
POST.REF.
✔
G22
20 – –
ACCOUNT Acc. Depr. —Store Equipment
DEBIT CREDIT
ACCOUNT NO. 2110
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 15 4 8 7 99
POST.REF.
✔20 – –
ACCOUNT Accounts Payable
DEBIT CREDIT
ACCOUNT NO. 2120
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 1 3 5 6 14 1 3 5 6 14
POST.REF.
G2220 – –
ACCOUNT Federal Income Tax Payable
DEBIT CREDIT
ACCOUNT NO. 2130
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 1 1 2 5 58
POST.REF.
✔20 – –
ACCOUNT Employee Income Tax Payable
DEBIT CREDIT
ACCOUNT NO. 2135
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 9 0 3 96
POST.REF.
✔20 – –
ACCOUNT Social Security Tax Payable
DEBIT CREDIT
ACCOUNT NO. 2140
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 2 1 1 41
POST.REF.
✔20 – –
ACCOUNT Medicare Tax Payable
DEBIT CREDIT
BTE_Ch16-425-465.qxd 11/9/07 9:05 PM Page 444 SECOND REVISED
Name Date Class
APPLICATION PROBLEM (continued)16-4
Chapter 16 Recording Adjusting and Closing Entries for a Corporation • 445
ACCOUNT NO. 2145
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 2 3 4 5 99
POST.REF.
✔20 – –
ACCOUNT Sales Tax Payable
DEBIT CREDIT
ACCOUNT NO. 2150
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 2 5 60
POST.REF.
✔20 – –
ACCOUNT Unemployment Tax Payable—Federal
DEBIT CREDIT
ACCOUNT NO. 2155
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 1 7 2 80
POST.REF.
✔20 – –
ACCOUNT Unemployment Tax Payable—State
DEBIT CREDIT
ACCOUNT NO. 2160
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 3 5 0 00
POST.REF.
✔20 – –
ACCOUNT Health Insurance Premiums Payable
DEBIT CREDIT
ACCOUNT NO. 2165
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 5 0 00
POST.REF.
✔20 – –
ACCOUNT U.S. Savings Bonds Payable
DEBIT CREDIT
ACCOUNT NO. 2170
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 6 0 00
POST.REF.
✔20 – –
ACCOUNT United Way Donations Payable
DEBIT CREDIT
BTE_Ch16-425-465.qxd 11/9/07 9:06 PM Page 445 SECOND REVISED
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING446 • Working Papers TE
APPLICATION PROBLEM (continued)16-4
ACCOUNT NO. 2180
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 5 0 0 0 00
POST.REF.
✔20 – –
ACCOUNT Dividends Payable
DEBIT CREDIT
ACCOUNT NO. 3110
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 125 0 0 0 00
POST.REF.
✔20 – –
ACCOUNT Capital Stock
DEBIT CREDIT
ACCOUNT NO. 3120
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 1
31
31
Balance
20 0 0 0 00
91 9 9 2 94
136 8 4 3 68
228 8 3 6 62
208 8 3 6 62
POST.REF.
✔
G23
G23
20 – –
ACCOUNT Retained Earnings
DEBIT CREDIT
ACCOUNT NO. 3130
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
20 0 0 0 00
20 0 0 0 00
POST.REF.
✔
G23
20 – –
ACCOUNT Dividends
DEBIT CREDIT
ACCOUNT NO. 3140
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
31
31
641 7 7 7 81
91 9 9 2 94
1 4 8 3 60
732 2 8 7 15
POST.REF.
G22
G23
G23
G23
20 – –
ACCOUNT Income Summary
DEBIT CREDIT
1 4 8 3 60
733 7 7 0 75
91 9 9 2 94
BTE_Ch16-425-465.qxd 11/9/07 9:06 PM Page 446 SECOND REVISED
Name Date Class
APPLICATION PROBLEM (continued)16-4
Chapter 16 Recording Adjusting and Closing Entries for a Corporation • 447
ACCOUNT NO. 4110
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
724 1 8 3 99
724 1 8 3 99
POST.REF.
✔
G23
20 – –
ACCOUNT Sales
DEBIT CREDIT
ACCOUNT NO. 4120
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
1 6 9 4 48
1 6 9 4 48
POST.REF.
✔
G23
20 – –
ACCOUNT Sales Discount
DEBIT CREDIT
ACCOUNT NO. 4130
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
4 1 8 9 64
4 1 8 9 64
POST.REF.
✔
G23
20 – –
ACCOUNT Sales Returns and Allowances
DEBIT CREDIT
ACCOUNT NO. 5110
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
331 8 0 5 18
331 8 0 5 18
POST.REF.
✔
G23
20 – –
ACCOUNT Purchases
DEBIT CREDIT
ACCOUNT NO. 5120
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
3 4 1 8 47
3 4 1 8 47
POST.REF.
✔
G23
20 – –
ACCOUNT Purchases Discount
DEBIT CREDIT
BTE_Ch16-425-465.qxd 11/9/07 9:06 PM Page 447 SECOND REVISED
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING448 • Working Papers TE
APPLICATION PROBLEM (continued)16-4
ACCOUNT NO. 5130
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
4 6 8 4 69
4 6 8 4 69
POST.REF.
✔
G23
20 – –
ACCOUNT Purch. Returns and Allowances
DEBIT CREDIT
ACCOUNT NO. 6105
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
14 5 1 8 00
14 5 1 8 00
POST.REF.
✔
G23
20 – –
ACCOUNT Advertising Expense
DEBIT CREDIT
ACCOUNT NO. 6110
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
4 60
4 60
POST.REF.
✔
G23
20 – –
ACCOUNT Cash Short and Over
DEBIT CREDIT
ACCOUNT NO. 6115
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
12 1 8 0 00
12 1 8 0 00
POST.REF.
✔
G23
20 – –
ACCOUNT Credit Card Fee Expense
DEBIT CREDIT
ACCOUNT NO. 6120
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
3 5 8 0 00
3 5 8 0 00
3 5 8 0 00
POST.REF.
G22
G23
20 – –
ACCOUNT Depr. Exp. —Office Equipment
DEBIT CREDIT
ACCOUNT NO. 6125
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
6 1 4 0 00
6 1 4 0 00
6 1 4 0 00
POST.REF.
G22
G23
20 – –
ACCOUNT Depr. Exp. —Store Equipment
DEBIT CREDIT
BTE_Ch16-425-465.qxd 11/9/07 9:06 PM Page 448 SECOND REVISED
Name Date Class
APPLICATION PROBLEM (continued)16-4
Chapter 16 Recording Adjusting and Closing Entries for a Corporation • 449
ACCOUNT NO. 6130
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
7 2 0 0 00
7 2 0 0 00
7 2 0 0 00
POST.REF.
G22
G23
20 – –
ACCOUNT Insurance Expense
DEBIT CREDIT
ACCOUNT NO. 6135
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
6 4 8 1 00
6 4 8 1 00
POST.REF.
✔
G23
20 – –
ACCOUNT Miscellaneous Expense
DEBIT CREDIT
ACCOUNT NO. 6140
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
14 1 8 4 60
14 1 8 4 60
POST.REF.
✔
G23
20 – –
ACCOUNT Payroll Taxes Expense
DEBIT CREDIT
ACCOUNT NO. 6145
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
20 1 5 0 00
20 1 5 0 00
POST.REF.
✔
G23
20 – –
ACCOUNT Rent Expense
DEBIT CREDIT
ACCOUNT NO. 6150
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
168 4 8 3 60
168 4 8 3 60
POST.REF.
✔
G23
20 – –
ACCOUNT Salary Expense
DEBIT CREDIT
ACCOUNT NO. 6155
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
5 8 4 7 10
5 8 4 7 10
5 8 4 7 10
POST.REF.
G22
G23
20 – –
ACCOUNT Supplies Expense—Office
DEBIT CREDIT
BTE_Ch16-425-465.qxd 11/9/07 9:06 PM Page 449 SECOND REVISED
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING450 • Working Papers TE
APPLICATION PROBLEM (continued)16-4
ACCOUNT NO. 6160
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
4 9 1 8 50
4 9 1 8 50
4 9 1 8 50
POST.REF.
G22
G23
20 – –
ACCOUNT Supplies Expense—Store
DEBIT CREDIT
ACCOUNT NO. 6165
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
3 5 6 0 00
3 5 6 0 00
3 5 6 0 00
POST.REF.
G22
G23
20 – –
ACCOUNT Uncollectible Accounts Expense
DEBIT CREDIT
ACCOUNT NO. 6170
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
5 4 8 4 97
5 4 8 4 97
POST.REF.
✔
G23
20 – –
ACCOUNT Utilities Expense
DEBIT CREDIT
ACCOUNT NO. 7105
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
31
Balance
1 3 5 6 14
31 3 5 6 14
30 0 0 0 00
31 3 5 6 14
POST.REF.
✔
G22
G23
20 – –
ACCOUNT Federal Income Tax Expense
DEBIT CREDIT
BTE_Ch16-425-465.qxd 11/9/07 9:06 PM Page 450 SECOND REVISED
Name Date Class
APPLICATION PROBLEM (concluded)16-4
5.
Chapter 16 Recording Adjusting and Closing Entries for a Corporation • 451
Cash
Petty Cash
Accounts Receivable
Allow. for Uncoll. Accts.
Merchandise Inventory
Supplies—Office
Supplies—Store
Prepaid Insurance
Office Equipment
Acc. Depr.—Office Equipment
Store Equipment
Acc. Depr.—Store Equipment
Accounts Payable
Federal Income Tax Payable
Employee Income Tax Payable
Social Security Tax Payable
Medicare Tax Payable
Sales Tax Payable
Unemployment Tax Payable—Federal
Unemployment Tax Payable—State
Health Insurance Premiums Payable
U.S. Savings Bonds Payable
United Way Donations Payable
Dividends Payable
Capital Stock
Retained Earnings
Totals
Wilson Paint, Inc.
Post-Closing Trial Balance
December 31, 20 – –
CREDITDEBITACCOUNT TITLE
15 4 8 2 00
5 0 0 00
42 1 5 8 80
276 0 1 8 93
3 1 1 74
6 3 0 05
8 0 0 00
22 1 5 8 66
34 1 5 8 11
392 2 1 8 29
4 2 4 4 20
8 4 2 8 00
18 6 2 0 00
15 4 8 7 99
1 3 5 6 14
1 1 2 5 58
9 0 3 96
2 1 1 41
2 3 4 5 99
2 5 60
1 7 2 80
3 5 0 00
5 0 00
6 0 00
5 0 0 0 00
125 0 0 0 00
208 8 3 6 62
392 2 1 8 29
BTE_Ch16-425-465.qxd 11/9/07 9:06 PM Page 451 SECOND REVISED
MASTERY PROBLEM, pp. 502, 50316-5
Journalizing and posting adjusting and closing entries; preparing a post-closing trial balance
1., 2.
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING452 • Working Papers TE
GENERAL JOURNAL PAGE 18
DATE ACCOUNT TITLE DEBIT CREDITDOC.NO.
POST.REF.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Dec.20 – –
31
31
31
31
31
31
31
31
Uncollectible Accounts Expense
Allowance for Uncollectible Accounts
Income Summary
Merchandise Inventory
Supplies Expense—Office
Supplies—Office
Supplies Expense—Store
Supplies—Store
Insurance Expense
Prepaid Insurance
Depreciation Expense—Office Equipment
Accumulated Depreciation—Office Equipment
Depreciation Expense—Store Equipment
Accumulated Depreciation—Store Equipment
Federal Income Tax Expense
Federal Income Tax Payable
2 1 2 0 00
3 4 8 8 14
3 1 4 8 66
5 3 4 8 84
6 0 0 0 00
3 5 8 0 00
6 1 4 0 00
9 6 5 64
2 1 2 0 00
3 4 8 8 14
3 1 4 8 66
5 3 4 8 84
6 0 0 0 00
3 5 8 0 00
6 1 4 0 00
9 6 5 64
6165
1135
3140
1140
6155
1145
6160
1150
6130
1160
6120
1210
6125
1220
7105
2120
Adjusting Entries
BTE_Ch16-425-465.qxd 11/9/07 9:06 PM Page 452 SECOND REVISED
Name Date Class
MASTERY PROBLEM (continued)16-5
3., 4.
Chapter 16 Recording Adjusting and Closing Entries for a Corporation • 453
GENERAL JOURNAL PAGE 19
DATE ACCOUNT TITLE DEBIT CREDITDOC.NO.
POST.REF.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
Dec.20 – –
31
31
31
31
Sales
Purchases Discount
Purchases Ret. and Allow.
Income Summary
Income Summary
Sales Discount
Sales Returns and Allow.
Purchases
Advertising Expense
Cash Short and Over
Credit Card Fee Expense
Depr. Exp.—Office Equipment
Depr. Exp.—Store Equipment
Insurance Expense
Miscellaneous Expense
Payroll Taxes Expense
Rent Expense
Salary Expense
Supplies Expense—Office
Supplies Expense—Store
Uncollectible Accounts Expense
Utilities Expense
Federal Income Tax Expense
Income Summary
Retained Earnings
Retained Earnings
Dividends
514 8 1 5 35
2 1 5 4 65
2 8 8 9 41
488 2 3 2 65
28 1 3 8 62
16 0 0 0 00
519 8 5 9 41
2 1 5 4 94
6 1 8 4 74
301 5 4 8 60
2 4 9 1 95
5 25
8 1 5 4 62
3 5 8 0 00
6 1 4 0 00
6 0 0 0 00
4 1 0 00
14 1 8 4 60
15 4 0 0 00
102 2 4 0 30
3 1 4 8 66
5 3 4 8 84
2 1 2 0 00
4 1 5 4 51
4 9 6 5 64
28 1 3 8 62
16 0 0 0 00
4110
5120
5130
3140
3140
4120
4130
5110
6105
6110
6115
6120
6125
6130
6135
6140
6145
6150
6155
6160
6165
6170
7105
3140
3120
3120
3130
Closing Entries
BTE_Ch16-425-465.qxd 11/9/07 9:06 PM Page 453 SECOND REVISED
MASTERY PROBLEM (continued)16-5
2., 4. GENERAL LEDGER
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING454 • Working Papers TE
ACCOUNT NO. 1110
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 5 1 2 4 12
POST.REF.
✔20 – –
ACCOUNT Cash
DEBIT CREDIT
ACCOUNT NO. 1120
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 2 5 0 00
POST.REF.
✔20 – –
ACCOUNT Petty Cash
DEBIT CREDIT
ACCOUNT NO. 1130
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 14 8 4 3 30
POST.REF.
✔20 – –
ACCOUNT Accounts Receivable
DEBIT CREDIT
ACCOUNT NO. 1135
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
2 1 2 0 00
1 2 4 55
2 2 4 4 55
POST.REF.
✔
G18
20 – –
ACCOUNT Allow. for Uncoll. Accts.
DEBIT CREDIT
ACCOUNT NO. 1140
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
3 4 8 8 14
154 3 1 8 22
150 8 3 0 08
POST.REF.
✔
G18
20 – –
ACCOUNT Merchandise Inventory
DEBIT CREDIT
BTE_Ch16-425-465.qxd 11/9/07 9:06 PM Page 454 SECOND REVISED
Name Date Class
MASTERY PROBLEM (continued)16-5
Chapter 16 Recording Adjusting and Closing Entries for a Corporation • 455
ACCOUNT NO. 1145
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
3 1 4 8 66
3 4 1 5 58
2 6 6 92
POST.REF.
✔
G18
20 – –
ACCOUNT Supplies—Office
DEBIT CREDIT
ACCOUNT NO. 1150
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
5 3 4 8 84
6 1 8 4 56
8 3 5 72
POST.REF.
✔
G18
20 – –
ACCOUNT Supplies—Store
DEBIT CREDIT
ACCOUNT NO. 1160
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
6 0 0 0 00
7 0 0 0 00
1 0 0 0 00
POST.REF.
�
G18
20 – –
ACCOUNT Prepaid Insurance
DEBIT CREDIT
ACCOUNT NO. 1205
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 21 4 8 2 66
POST.REF.
✔20 – –
ACCOUNT Office Equipment
DEBIT CREDIT
ACCOUNT NO. 1210
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
3 5 8 0 00
6 4 8 0 00
10 0 6 0 00
POST.REF.
✔
G18
20 – –
ACCOUNT Acc. Depr. —Office Equipment
DEBIT CREDIT
ACCOUNT NO. 1215
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 40 4 8 1 66
POST.REF.
✔20 – –
ACCOUNT Store Equipment
DEBIT CREDIT
BTE_Ch16-425-465.qxd 11/9/07 9:06 PM Page 455 SECOND REVISED
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING456 • Working Papers TE
MASTERY PROBLEM (continued)16-5
ACCOUNT NO. 1220
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
6 1 4 0 00
18 4 8 0 00
24 6 2 0 00
POST.REF.
✔
G18
20 – –
ACCOUNT Acc. Depr. —Store Equipment
DEBIT CREDIT
ACCOUNT NO. 2110
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 8 4 1 8 36
POST.REF.
✔20 – –
ACCOUNT Accounts Payable
DEBIT CREDIT
ACCOUNT NO. 2120
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 9 6 5 64 9 6 5 64
POST.REF.
G1820 – –
ACCOUNT Federal Income Tax Payable
DEBIT CREDIT
ACCOUNT NO. 2130
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 4 5 8 00
POST.REF.
✔20 – –
ACCOUNT Employee Income Tax Payable
DEBIT CREDIT
ACCOUNT NO. 2135
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 5 2 8 24
POST.REF.
✔20 – –
ACCOUNT Social Security Tax Payable
DEBIT CREDIT
ACCOUNT NO. 2140
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 1 2 3 54
POST.REF.
✔20 – –
ACCOUNT Medicare Tax Payable
DEBIT CREDIT
BTE_Ch16-425-465.qxd 11/9/07 9:06 PM Page 456 SECOND REVISED
Name Date Class
MASTERY PROBLEM (continued)16-5
Chapter 16 Recording Adjusting and Closing Entries for a Corporation • 457
ACCOUNT NO. 2145
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 1 4 1 5 30
POST.REF.
✔20 – –
ACCOUNT Sales Tax Payable
DEBIT CREDIT
ACCOUNT NO. 2150
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 4 00
POST.REF.
✔20 – –
ACCOUNT Unemployment Tax Payable—Federal
DEBIT CREDIT
ACCOUNT NO. 2155
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 2 7 00
POST.REF.
✔20 – –
ACCOUNT Unemployment Tax Payable—State
DEBIT CREDIT
ACCOUNT NO. 2160
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 2 5 0 00
POST.REF.
✔20 – –
ACCOUNT Health Insurance Premiums Payable
DEBIT CREDIT
ACCOUNT NO. 2165
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 4 0 00
POST.REF.
✔20 – –
ACCOUNT U.S. Savings Bonds Payable
DEBIT CREDIT
ACCOUNT NO. 2170
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 6 0 00
POST.REF.
✔20 – –
ACCOUNT United Way Donations Payable
DEBIT CREDIT
BTE_Ch16-425-465.qxd 11/9/07 9:06 PM Page 457 SECOND REVISED
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING458 • Working Papers TE
MASTERY PROBLEM (continued)16-5
ACCOUNT NO. 2180
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 4 0 0 0 00
POST.REF.
✔20 – –
ACCOUNT Dividends Payable
DEBIT CREDIT
ACCOUNT NO. 3110
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31 Balance 80 0 0 0 00
POST.REF.
✔20 – –
ACCOUNT Capital Stock
DEBIT CREDIT
ACCOUNT NO. 3120
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
31
Balance
16 0 0 0 00
28 1 3 8 62
89 7 6 1 21
117 8 9 9 83
101 8 9 9 83
POST.REF.
✔
G19
G19
20 – –
ACCOUNT Retained Earnings
DEBIT CREDIT
ACCOUNT NO. 3130
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
16 0 0 0 00
16 0 0 0 00
POST.REF.
✔
G19
20 – –
ACCOUNT Dividends
DEBIT CREDIT
ACCOUNT NO. 3140
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
31
31
3 4 8 8 14
488 2 3 2 65
28 1 3 8 62
519 8 5 9 41
3 4 8 8 14
516 3 7 1 27
28 1 3 8 62
POST.REF.
G18
G19
G19
G19
20 – –
ACCOUNT Income Summary
DEBIT CREDIT
BTE_Ch16-425-465.qxd 11/9/07 9:06 PM Page 458 SECOND REVISED
Name Date Class
Chapter 16 Recording Adjusting and Closing Entries for a Corporation • 459
MASTERY PROBLEM (continued)16-5
ACCOUNT NO. 4110
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
514 8 1 5 35
514 8 1 5 35
POST.REF.
✔
G19
20 – –
ACCOUNT Sales
DEBIT CREDIT
ACCOUNT NO. 4120
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
2 1 5 4 94
2 1 5 4 94
POST.REF.
✔
G19
20 – –
ACCOUNT Sales Discount
DEBIT CREDIT
ACCOUNT NO. 4130
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
6 1 8 4 74
6 1 8 4 74
POST.REF.
✔
G19
20 – –
ACCOUNT Sales Returns and Allowances
DEBIT CREDIT
ACCOUNT NO. 5110
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
301 5 4 8 60
301 5 4 8 60
POST.REF.
✔
G19
20 – –
ACCOUNT Purchases
DEBIT CREDIT
ACCOUNT NO. 5120
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
2 1 5 4 65
2 1 5 4 65
POST.REF.
✔
G19
20 – –
ACCOUNT Purchases Discount
DEBIT CREDIT
BTE_Ch16-425-465.qxd 11/9/07 9:06 PM Page 459 SECOND REVISED
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING460 • Working Papers TE
MASTERY PROBLEM (continued)16-5
ACCOUNT NO. 5130
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
2 8 8 9 41
2 8 8 9 41
POST.REF.
✔
G19
20 – –
ACCOUNT Purch. Returns and Allowances
DEBIT CREDIT
ACCOUNT NO. 6105
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
2 4 9 1 95
2 4 9 1 95
POST.REF.
✔
G19
20 – –
ACCOUNT Advertising Expense
DEBIT CREDIT
ACCOUNT NO. 6110
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
5 25
5 25
POST.REF.
✔
G19
20 – –
ACCOUNT Cash Short and Over
DEBIT CREDIT
ACCOUNT NO. 6115
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
8 1 5 4 62
8 1 5 4 62
POST.REF.
✔
G19
20 – –
ACCOUNT Credit Card Fee Expense
DEBIT CREDIT
ACCOUNT NO. 6120
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
3 5 8 0 00
3 5 8 0 00
3 5 8 0 00
POST.REF.
G18
G19
20 – –
ACCOUNT Depr. Exp. —Office Equipment
DEBIT CREDIT
ACCOUNT NO. 6125
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
6 1 4 0 00
6 1 4 0 00
6 1 4 0 00
POST.REF.
G18
G19
20 – –
ACCOUNT Depr. Exp. —Store Equipment
DEBIT CREDIT
BTE_Ch16-425-465.qxd 11/9/07 9:06 PM Page 460 SECOND REVISED
Name Date Class
Chapter 16 Recording Adjusting and Closing Entries for a Corporation • 461
MASTERY PROBLEM (continued)16-5
ACCOUNT NO. 6130
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
6 0 0 0 00
6 0 0 0 00
6 0 0 0 00
POST.REF.
G18
G19
20 – –
ACCOUNT Insurance Expense
DEBIT CREDIT
ACCOUNT NO. 6135
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
4 1 0 00
4 1 0 00
POST.REF.
✔
G19
20 – –
ACCOUNT Miscellaneous Expense
DEBIT CREDIT
ACCOUNT NO. 6140
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
14 1 8 4 60
14 1 8 4 60
POST.REF.
✔
G19
20 – –
ACCOUNT Payroll Taxes Expense
DEBIT CREDIT
ACCOUNT NO. 6145
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
15 4 0 0 00
15 4 0 0 00
POST.REF.
✔
G19
20 – –
ACCOUNT Rent Expense
DEBIT CREDIT
ACCOUNT NO. 6150
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
102 2 4 0 30
102 2 4 0 30
POST.REF.
✔
G19
20 – –
ACCOUNT Salary Expense
DEBIT CREDIT
ACCOUNT NO. 6155
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
3 1 4 8 66
3 1 4 8 66
3 1 4 8 66
POST.REF.
G18
G19
20 – –
ACCOUNT Supplies Expense—Office
DEBIT CREDIT
BTE_Ch16-425-465.qxd 11/9/07 9:06 PM Page 461 SECOND REVISED
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING462 • Working Papers TE
MASTERY PROBLEM (continued)16-5
ACCOUNT NO. 6160
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
5 3 4 8 84
5 3 4 8 84
5 3 4 8 84
POST.REF.
G18
G19
20 – –
ACCOUNT Supplies Expense—Store
DEBIT CREDIT
ACCOUNT NO. 6165
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
2 1 2 0 00
2 1 2 0 00
2 1 2 0 00
POST.REF.
G18
G19
20 – –
ACCOUNT Uncollectible Accounts Expense
DEBIT CREDIT
ACCOUNT NO. 6170
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
Balance
4 1 5 4 51
4 1 5 4 51
POST.REF.
✔
G19
20 – –
ACCOUNT Utilities Expense
DEBIT CREDIT
ACCOUNT NO. 7105
DATE ITEMBALANCE
DEBIT CREDIT
Dec. 31
31
31
Balance
9 6 5 64
4 9 6 5 64
4 0 0 0 00
4 9 6 5 64
POST.REF.
✔
G18
G19
20 – –
ACCOUNT Federal Income Tax Expense
DEBIT CREDIT
BTE_Ch16-425-465.qxd 11/9/07 9:06 PM Page 462 SECOND REVISED
Name Date Class
Chapter 16 Recording Adjusting and Closing Entries for a Corporation • 463
MASTERY PROBLEM (concluded)16-5
Cash
Petty Cash
Accounts Receivable
Allow. for Uncoll. Accts.
Merchandise Inventory
Supplies—Office
Supplies—Store
Prepaid Insurance
Office Equipment
Acc. Depr.—Office Equipment
Store Equipment
Acc. Depr.—Store Equipment
Accounts Payable
Federal Income Tax Payable
Employee Income Tax Payable
Social Security Tax Payable
Medicare Tax Payable
Sales Tax Payable
Unemployment Tax Payable—Federal
Unemployment Tax Payable—State
Health Insurance Premiums Payable
U.S. Savings Bonds Payable
United Way Donations Payable
Dividends Payable
Capital Stock
Retained Earnings
Totals
Northern Lights
Post-Closing Trial Balance
December 31, 20 – –
CREDITDEBITACCOUNT TITLE
5 1 2 4 12
2 5 0 00
14 8 4 3 30
150 8 3 0 08
2 6 6 92
8 3 5 72
1 0 0 0 00
21 4 8 2 66
40 4 8 1 66
235 1 1 4 46
2 2 4 4 55
10 0 6 0 00
24 6 2 0 00
8 4 1 8 36
9 6 5 64
4 5 8 00
5 2 8 24
1 2 3 54
1 4 1 5 30
4 00
2 7 00
2 5 0 00
4 0 00
6 0 00
4 0 0 0 00
80 0 0 0 00
101 8 9 9 83
235 1 1 4 46
5.
BTE_Ch16-425-465.qxd 11/9/07 9:06 PM Page 463 SECOND REVISED
CHALLENGE PROBLEM, p. 50416-6
Inventory auditing challenges
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING464 • Working Papers TE
1. Grain in a grain elevator:
Measuring/calculating: The depth of grain in the elevator can be measured and the circum-
ference or perimeter of the elevator can be measured or calculated. Then the total volume of
grain can be calculated and divided by the volume of one bushel of grain to determine the
total bushels. This number can then be multiplied by the cost per bushel of grain.
2. Lumber in a lumber yard:
Actual count, unique costs: Each size of lumber would have a different cost. Count the
number of pieces for each size, then multiply by the cost to determine the total cost for each
size of lumber. Then total these individual totals to determine the inventory value.
3. Diamond rings in a jewelry store:
Actual count, unique costs: Assuming each diamond ring is different, the cost of each dia-
mond ring should be totaled to determine the inventory value.
4. Nails in a home improvement store:
Sampling: The value of each nail is low and there are many nails in inventory. Therefore, a
small quantity may be counted or weighed. Then the total cost based on the sample size or
weight can be estimated.
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