Lampert roofing worksheet

CHAPTER 4

Completing the Accounting Cycle

ASSIGNMENT CLASSIFICATION TABLE

Learning Objectives

Questions

Brief

Exercises

Do It!

Exercises

A

Problems

B

Problems

*1. Prepare a worksheet.

1, 2, 3, 4, 5

1, 2, 3

1

1, 2, 3, 5, 6

1A, 2A, 3A,

4A, 5A

1B, 2B, 3B,

4B, 5B

*2. Explain the process of closing the books.

6, 7, 11, 12

4, 5, 6

2

4, 7, 8, 11, 19

1A, 2A, 3A,

4A, 5A

1B, 2B, 3B,

4B, 5B

*3. Describe the content and purpose of a post-closing trial balance.

8, 9

7

4, 7, 8

1A, 2A, 3A,

4A, 5A

1B, 2B, 3B,

4B, 5B

*4. State the required steps in the accounting cycle.

10, 11, 12

8

10, 19

5A

5B

*5. Explain the approaches to preparing correcting entries.

13

9

12, 13

6A

*6. Identify the sections of a classified balance sheet.

14, 15, 16,

17, 18, 19

10, 11

3, 4

3, 9, 14, 15, 16, 17

1A, 2A, 3A,

4A, 5A

1B, 2B, 3B,

4B, 5B

*7. Prepare reversing entries.

10, 20, 21

12

18, 19

*Note: All asterisked Questions, Exercises, and Problems relate to material contained in the appendix *to the chapter.

ASSIGNMENT CHARACTERISTICS TABLE

Problem

Number

Description

Difficulty

Level

Time Allotted (min.)

1A

Prepare worksheet, financial statements, and adjusting and closing entries.

Simple

40–50

2A

Complete worksheet; prepare financial statements, closing entries, and post-closing trial balance.

Moderate

50–60

3A

Prepare financial statements, closing entries, and post-closing trial balance.

Moderate

40–50

4A

Complete worksheet; prepare classified balance sheet, entries, and post-closing trial balance.

Moderate

50–60

5A

Complete all steps in accounting cycle.

Complex

70–90

6A

Analyze errors and prepare correcting entries and trial balance.

Moderate

40–50

1B

Prepare worksheet, financial statements, and adjusting and closing entries.

Simple

40–50

2B

Complete worksheet; prepare financial statements, closing entries, and post-closing trial balance.

Moderate

50–60

3B

Prepare financial statements, closing entries, and post-closing trial balance.

Moderate

40–50

4B

Complete worksheet; prepare classified balance sheet, entries, and post-closing trial balance.

Moderate

50–60

5B

Complete all steps in accounting cycle.

Complex

70–90

Comprehensive Problem: Chapters 2 to 4

WEYGANDT ACCOUNTING PRINCIPLES 11E

CHAPTER 4

COMPLETING THE ACCOUNTING CYCLE

Number

LO

BT

Difficulty

Time (min.)

BE1

1

K

Simple

2–4

BE2

1

AN

Moderate

6–8

BE3

1

C

Simple

3–5

BE4

2

AP

Simple

3–5

BE5

2

AP

Simple

4–6

BE6

2

AP

Simple

6–8

BE7

3

C

Simple

2–4

BE8

4

K

Simple

3–5

BE9

5

AN

Moderate

4–6

BE10

6

AP

Simple

4–6

BE11

6

C

Simple

3–5

BE12

7

AN

Moderate

4–6

DI1

1

C

Simple

4–6

DI2

2

AP

Simple

2–4

DI3

6

AP

Simple

6–8

DI4

6

C

Simple

4–6

EX1

1

AP

Simple

12–15

EX2

1

AP

Simple

10–12

EX3

1, 6

AP

Simple

12–15

EX4

2, 3

AP

Simple

12–15

EX5

1

AN

Simple

10–12

EX6

1

AN

Moderate

12–15

EX7

2, 3

AP

Simple

8–10

EX8

2, 3

AP

Simple

10–12

EX9

6

AP

Simple

12–15

EX10

4

C

Simple

3–5

EX11

2

AP

Simple

6–8

EX12

5

AN

Moderate

8–10

EX13

5

AN

Moderate

4–6

EX14

6

AP

Moderate

10–12

EX15

6

C

Simple

5–8

EX16

6

AP

Simple

8–10

COMPLETING THE ACCOUNTING CYCLE (Continued)

Number

LO

BT

Difficulty

Time (min.)

EX17

6

AP

Simple

12–15

EX18

7

AN

Moderate

5–7

EX19

2, 4, 7

AN

Moderate

10–12

P1A

1-3, 6

AN

Simple

40–50

P2A

1-3, 6

AP

Moderate

50–60

P3A

1-3, 6

AP

Moderate

40–50

P4A

1-3, 6

AN

Moderate

50–60

P5A

1-4, 6

AN

Complex

70–90

P6A

5

AN

Moderate

40–50

P1B

1-3, 6

AN

Simple

40–50

P2B

1-3, 6

AP

Moderate

50–60

P3B

1-3, 6

AP

Moderate

40–50

P4B

1-3, 6

AN

Moderate

50–60

P5B

1-4, 6

AN

Complex

70–90

BYP1

6

AN

Simple

10–12

BYP2

6

AN

Simple

8–10

BYP3

6

AN

Simple

8–10

BYP4

—

E

Simple

10–12

BYP5

6

AN

Moderate

15–20

BYP6

4

C

Simple

15–20

BYP7

—

E

Moderate

10–15

BYP8

6

AP

Moderate

12–16

BYP9

—

AP

Moderate

10–15

ANSWERS TO QUESTIONS

 1. No. A worksheet is not a permanent accounting record. The use of a worksheet is an optional step in the accounting cycle.

 2. The worksheet is merely a device used to make it easier to prepare adjusting entries and the financial statements.

 3. The amount shown in the adjusted trial balance column for an account equals the account balance in the ledger after adjusting entries have been journalized and posted.

 4. The net income of $12,000 will appear in the income statement debit column and the balance sheet credit column. A net loss will appear in the income statement credit column and the balance sheet debit column.

 5. Formal financial statements are needed because the columnar data are not properly arranged and classified for statement purposes. For example, a drawing account is listed with assets.

 6. (1) (Dr) Individual revenue accounts and (Cr) Income Summary.

(2) (Dr) Income Summary and (Cr) Individual expense accounts.

(3) (Dr) Income Summary and (Cr) Owner’s Capital (for net income).

(4) (Dr) Owner’s Capital and (Cr) Owner’s Drawings.

 7. Income Summary is a temporary account that is used in the closing process. The account is debited for expenses and credited for revenues. The difference, either net income or net loss, is then closed to the owner’s capital account.

 8. The post-closing trial balance contains only balance sheet accounts. Its purpose is to prove the equality of the permanent account balances that are carried forward into the next accounting period.

 9. The accounts that will not appear in the post-closing trial balance are Depreciation Expense; Owner’s Drawing; and Service Revenue.

10. A reversing entry is the exact opposite, both in amount and in account titles, of an adjusting entry and is made at the beginning of the new accounting period. Reversing entries are an optional step in the accounting cycle.

11. The steps that involve journalizing are: (1) journalize the transactions, (2) journalize the adjusting entries, and (3) journalize the closing entries.

12. The three trial balances are the: (1) trial balance, (2) adjusted trial balance, and (3) post-closing trial balance.

13. Correcting entries differ from adjusting entries because they: (1) are not a required part of the accounting cycle, (2) may be made at any time, and (3) may affect any combination of accounts.

Questions Chapter 4 (Continued)

*14. The standard classifications in a balance sheet are:

Assets

Liabilities and Owner’s Equity

Current Assets

Current Liabilities

Long-term Investments

Long-term Liabilities

Property, Plant, and Equipment

Owner’s Equity

Intangible Assets

*15. The operating cycle of a company is the average time that it takes to purchase inventory, sell it on account, and then collect cash from customers.

*16. Current assets are assets that a company expects to convert to cash or use up in one year. Some companies use a period longer than one year to classify assets and liabilities as current because they have an operating cycle longer than one year. Companies usually list current assets in the order in which they expect to convert them into cash.

*17. Long-term investments are generally investments in stocks and bonds of other companies that are normally held for many years. Property, plant, and equipment are assets with relatively long useful lives that a company is currently using in operating the business.

*18. (a) The owner’s equity section for a corporation is called stockholders’ equity.

(b) The two accounts and the purpose of each are: (1) Common stock is used to record invest​ments of assets in the business by the owners (stockholders). (2) Retained earnings is used to record net income retained in the business.

*19.. Apple’s current liabilities at September 24, 2011 and September 25, 2010 were $27,970 million and $20,722 million respectively. Apple’s current liabilities were significantly lower than its current assets in both years.

*20. After reversing entries have been made, the balances will be Interest Payable, zero balance; Interest Expense, a credit balance.

*21. (a) Jan. 10 Salaries and Wages Expense 8,000

Cash 8,000

Because of the January 1 reversing entry that credited Salaries and Wages Expense for $3,500, Salaries and Wages Expense will have a debit balance of $4,500 which equals the expense for the current period.