ACCT 2301 Exam 2 Chapters 3 and 4

  

QUESTION 1

1. Prepare a formal Statement of Retained Earnings for Purple Co. for      the year ended December 31, 2020.

  

Net Income from Income Statement FYE December 31, 2020

$25,000 

 

Service Revenue from Income Statement FYE December 31, 2020

$86,000 

 

Dividends From Adjusted Trial Balance December 31, 2020

$7,500 

 

Unearned Revenue from Adjusted Trial Balance December 31, 2020

$6,000 

 

Retained Earnings From Post Closing Trial Balance, January 1, 2020

$45,000 

 

Cash from Adjusted Trial Balance December 31, 2020

$52,400 

 

QUESTION 2

1. Prepare the required adjusting entries for the following:

  

a.

Harvest work performed but not yet billed for. The amount for this   unbilled work is $86,000.

 

b.

$7,500 of prepaid insurance was used and needs to be accounted   for.  

 

c.

Some harvest work was paid in advance and posted as Unearned   Revenue.  Amount earned as of December 31 is $15,000.

 

d.

Harvest supplies need to be expensed in the amount of $4,500

 

e.

Harvest Equipment must be depreciated and the expense for that is   $9,500.  

QUESTION 3

1. Use the following Adjusted Trial Balance to journalize all the      necessary Closing Entries in the space below.

  

Harvest Industries

 

Adjusted Trial Balance

 

31-Dec-18

 

 

Account

Debit

Credit

 

Cash

$         30,000

 

Account Receivable

10,000

 

Harvest Supplies

2,500

 

Prepaid Insurance

1,000

 

Equipment

500,000

 

Account Payable

$            5,000

 

Common Stock

100,000

 

Retained Earnings

431,000

 

Dividends

60,000

 

Harvest Revenue

250,000

 

Harvest Expense

50,000

 

Wage Expense

75,000

 

Rent Expense

25,000

 

Interest Expense

5,000

 

Repairs Expense

27,500

 

      Totals

$       786,000

$       786,000

QUESTION 4

1. The following selected accounts and their balances are based on the      ledger balances after adjusting entries for Valentine Inc. for the year      ending December 31, 2020.  Use the necessary accounts and balances to      prepare an Income Statement, in good form, in the space below. 

  

Account Name

Balance

 

Service Revenue

$33,000

 

Unearned Revenue

$1,100

 

Accounts Receivable

$3,500

 

Utilities Expense

$2,600

 

Interest Expense

$125

 

Rent Payable

$300

 

Miscellaneous Expense

$1,150

 

Salaries Expense

$12,000

 

Cash

$18,600

 

Rent Expense

$6,000

QUESTION 5

1. Using the following      information, prepare the Classified Balance Sheet for Green      Company as of  July 31, 2020. (You may not need to use all the      accounts listed.)

  

Building

200,000

 

Unearned Revenue

4,500

 

Notes Payable – Long Term

15,000

 

Accumulated Depreciation –Building

50,000

 

Office Supplies

1,000

 

Retained Earnings

$127,000

 

Dividends

10,000

 

Depreciation Expense -Building

10,000

 

Cash

15,000

 

Transportation Expense

6,300

 

Prepaid Insurance

6,000

 

Common Stock

30,000

 

Accounts Payable

3,000

 

Accounts Receivable

7,500