B-04.01 Amber Nestor has an eye for quality. She recently formed an art gallery where she allows artists to display their artwork for sale. Customers buy the artwork through the gallery, but payments are actually made payable directly to the originating artist. Artists, in turn, pay Amber a 20% commission that is appropriately reflected as revenue of the gallery. Following is Amber's trial balance after the first year of operation. This trial balance does not reflect the adjustments that are necessary, as described by the additional infomation. AMBER NESTOR ART GALLERY Trial Balance As of December 31, 20X4 Debits Cash $ Supplies Credits 18,400 $ - 6,790 - 15,000 - Loan payable - 7,500 Capital stock - 25,000 Revenues - 48,590 Rent expense 11,000 - Salaries expense 24,000 - Interest expense 500 - Utilities expense 5,400 - Display equipment $ 81,090 $ 81,090 The Display equipment was purchased near the beginning of the year. It has a 3-year life and no salvage value. Its cost should be depreciated equally over its life. Amber is entitled to receive $17,900 of commissions for art sold. This revenue has not yet been recorded, but it is fully expected that the artists will soon be making payment. Supplies on hand at year end were counted, and amount to $3,400. December's rent of $1,000 has not yet been paid. (a) Prepare the necessary adjusting enties as of December 31, 20X4. (b) Use T-accounts to determine the adjusted balances of the accounts. (c) Prepare the adjusted trial balance for Amber Nestor. Name: B-04.01(a) Date: Section: GENERAL JOURNAL Date Page Accounts Debit Credit Debits Credits Dec. 31 Dec. 31 Dec. 31 Dec. 31 AMBER NESTOR ART GALLERY Adjusted Trial Balance As of December 31, 20X4 Cash Accounts receivable Supplies Display equipment Accumulated depreciation Rent payable Loan payable Capital stock Revenues Rent expense Name: Date: B-04.01(a) Section: Salaries expense Interest expense Utilities expense Total Debits/Credits Name: Date: B-04.01(a) Section: CASH REVENUES ACCOUNTS RECEIVABLE RENT EXPENSE SUPPLIES SALARIES EXPENSE DISPLAY EQUIPMENT INTEREST EXPENSE ACCUMULATED DEPRECIATION UTILITIES EXPENSE RENT PAYABLE LOAN PAYABLE CAPITAL STOCK B-04.02 Reagan Sakai is in charge of financial management for Land Monitrix. Land Monitrix utilizes satellite technology and sophisticated mapping software to alert its customers to trespassing, illegal dumping, and other encroachments on property these customers own around the globe. Customers typically purchase one-year contracts for this service, and the pricing depends on the number and size of sites monitored. Mr. Sakai desires to review financial reports -- an income statement, statement of retained earnings, and balance sheet. Prepare these reports from the following adjusted trial balance. Mr. Sakai needs this information for internal review purposes, and does not require a classified balance sheet. The operating data relate to the full year, and the blank worksheet already includes partial data. LAND MONITRIX CORPORATION Adjusted Trial Balance As of December 31, 20X5 Debits Cash $ Accounts receivable Credits 834,221 $ - 345,909 - Prepaid expenses 45,787 - Supplies 66,665 - 3,009,000 - Accumulated depreciation - 1,222,199 Accounts payable - 544,190 Unearned revenues - 455,000 Loan payable - 1,000,000 Capital stock - 560,000 Retained earnings, Jan. 1 - 228,892 Dividends 50,000 - Revenues - 2,373,402 Selling expenses 476,445 - Interest expense 80,000 - Salaries expense 677,667 - Maintenance and supplies expense 222,989 - Depreciation expense 575,000 - Satellite equipment $ 6,383,683 $ 6,383,683 Name: B-04.02 Date: Section: Income Statement Revenues Services to customers $ - Expenses $ - Net income $ - $ - $ - LAND MONITRIX CORPORATION Statement of Retained Earnings Beginning retained earnings Plus: Net income $ - $ - LAND MONITRIX CORPORATION Balance Sheet Assets Satellite equipment Less: Accumulated depreciation Total assets $ - $ - Name: Date: B-04.02 Section: Liabilities $ - Total liabilities $ - Stockholders' equity $ - Total stockholders' equity Total liabilities and equity $ - B-04.04 Identify the following accounts as real (permanent) accounts OR nominal (temporary) accounts. 1 Capital Stock 2 Revenues 3 Accumulated Depreciation 4 Salaries Expense 5 Accounts Payable 6 Dividends 7 Supplies 8 Rent Expense 9 Unearned Revenues 10 Income Summary 11 Equipment 12 Prepaid Rent 13 Interest Payable 14 Retained Earnings 15 Loan Payable B-04.05 Timber Creek prepared the following adjusted trial balance on December 31, 20X3. The company has completed preparation of financial statements and is now ready to prepare closing entries. TIMBER CREEK Adjusted Trial Balance As of December 31, 20X3 Debits Cash $ Accounts receivable Credits 35,600 $ - 23,700 - 7,500 - 325,700 - Accumulated depreciation - 40,400 Accounts payable - 34,800 Loan payable - 100,000 Capital stock - 80,000 Retained earnings - 70,000 Dividends 20,000 - Revenues - 478,400 Rent expense 120,000 - Salaries expense 235,600 - Supplies expense 18,000 - Interest expense 7,400 - 10,100 - Supplies Equipment Depreciation expense $ 803,600 $ 803,600 (a) Prepare the necessary closing entries. GENERAL JOURNAL Date Accounts Dec. 31 Page Credit Debit To close revenues to Income Summary Dec. 31 To close expenses to Income Summary Dec. 31 To close Income Summary to retained earnings Dec. 31 To close dividends (c) Prepare the post-closing trial balance. TIMBER CREEK Post-Closing Trial Balance As of December 31, 20X3 Debits $ $ Credits - $ $ - (b) Use T-accounts to determine the post-closing balances of the accounts. CASH DIVIDENDS closing ACCOUNTS RECEIVABLE REVENUES closing SUPPLIES RENT EXPENSE closing EQUIPMENT SALARIES EXPENSE closing ACCUMULATED DEPRECIATION SUPPLIES EXPENSE closing ACCOUNTS PAYABLE INTEREST EXPENSE closing LOAN PAYABLE DEPRECIATION EXPENSE closing CAPITAL STOCK INCOME SUMMARY closing closing RETAINED EARNINGS closing closing closing B-04.08 Liz Ross Corporation prepares a classified balance sheet that includes the following traditional sections: Current Assets Long-term Investments Property, Plant & Equipment Intangibles Other Assets Current Liabilities Long-term Liabilities Stockholders' Equity In which section of the classified balance sheet would the following accounts appear? Some of the accounts may not appear in the balance sheet. Please use the drop-down menu provided Note Payable (due in 3 months) Accumulated Depreciation Investment in Government Bonds Accounts Receivable Accounts Payable Long-term Receivable From Employee Dividends Capital Stock Patent Supplies Retained Earnings (ending) Rent Expense Unearned Revenues Income Summary Equipment Revenues Prepaid Rent Interest Payable Retained Earnings (beginning) Loan Payable (due in 5 years) B-04.08 ar? Some of the accounts may not Current Liabilities Please find the financial statements of your selected company. You can do this by either going to SEC.gov and searching for your company's 10K (annual report), or you can go to the company's website directly and click through investor relations until you find the financial reports. If you have any difficulties finding the Financial Statements, please let me know and I can assist you. Then answer the following questions: 1 What is Net Income for the most current year for your company? 2 What are Total Assets for the most current year for your company?
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