Exercise Set B

LO 5.1Identify whether each of the following accounts are nominal/temporary or real/permanent.

1. Rent Expense
2. Unearned Service Fee Revenue
3. Interest Revenue
4. Accounts Payable

LO 5.1For each of the following accounts, identify whether it is nominal/temporary or real/permanent, and whether it is reported on the Balance Sheet or the Income Statement.

1. Salaries Payable
2. Sales Revenue
3. Salaries Expense
4. Prepaid Insurance

LO 5.1For each of the following accounts, identify whether it would be closed at year-end (yes or no) and on which financial statement the account would be reported (Balance Sheet, Income Statement, or Retained Earnings Statement).

1. Retained Earnings
2. Prepaid Rent
3. Rent Expense
4. Rent Revenue
5. Salaries Expense
6. Salaries Payable
7. Supplies Expense
8. Unearned Rent Revenue

LO 5.1The following accounts and normal balances existed at year-end. Make the four journal entries required to close the books:

LO 5.1The following accounts and normal balances existed at year-end. Make the four journal entries required to close the books:

LO 5.1Use the following excerpts from the year-end Adjusted Trial Balance to prepare the four journal entries required to close the books:

LO 5.1Use the following T-accounts to prepare the four journal entries required to close the books:

LO 5.1Use the following T-accounts to prepare the four journal entries required to close the books:

LO 5.2Identify which of the following accounts would be listed on the company’s Post-Closing Trial Balance.

1. Accounts Receivable
2. Accumulated Depreciation
3. Cash
4. Office Expense
5. Note Payable
6. Rent Revenue
7. Retained Earnings
8. Unearned Rent Revenue

LO 5.2Identify which of the following accounts would not be listed on the company’s Post-Closing Trial Balance.

LO 5.3For each of the following accounts, identify in which section of the classified balance sheet it would be presented: current assets, property, intangibles, other assets, current liabilities, long-term liabilities, or stockholder’s equity.

1. Building
2. Cash
3. Common Stock
4. Copyright
5. Prepaid Advertising
6. Notes Payable (due six months later)
7. Taxes Payable
8. Unearned Rent Revenue

LO 5.3Using the following Balance Sheet summary information, calculate for the two years presented:

1. working capital
2. current ratio

LO 5.3Using the following account balances, calculate for the two years presented:

1. working capital
2. current ratio

LO 5.3Using the following Balance Sheet summary information, calculate for the two companies presented:

1. working capital
2. current ratio

Then:

3. evaluate which company’s liquidity position appears stronger, and why.

LO 5.3From the following Company B adjusted trial balance, prepare simple financial statements, as follows: