Completing End-of-Period Activities The general ledger accounts for Rivers Edge Canoe &

Identifying Accounts Affected by Closing Entries The following account names appear in the chart of accounts of Larkin’s Department Store. Instructions Use the form in your working papers to answer the following questions about each account. Assume that all accounts have normal balances. 1. Is the account affected by a closing entry? 2. During closing, is the account debited or credited? 3. During closing, is Income Summary debited or credited?

Instructions Review the source document and prepare the journal entry to record this transaction in your working papers. Your Backpack Inc. uses a cash payments journal to record disbursements.

Organizing the Steps in the Accounting Cycle Instructions List the following steps of the accounting cycle in their proper order. Use the form provided in your working papers or a separate sheet of paper. Analyzing business transactions Journalizing and posting closing entries Collecting and verifying source documents Posting journal entries to ledgers Completing the work sheet Preparing financial statements Journalizing business transactions Preparing a post-closing trial balance Journalizing and posting adjusting entries Preparing a trial balance

Journalizing the Closing Entries a. Which account(s) are used to close temporary accounts with debit and credit balances? b. How are temporary accounts with debit balances closed?

Posting the Closing Entries a. What is written in the Description column of the general ledger account as the closing entries are posted? b. What is entered in the Posting Reference column of the general ledger account?

Post-Closing Trial Balance a. What is the purpose of preparing a post-closing trial balance? b. Does the Income Summary account appear on the post-closing trial balance? Why or why not?

Accounting Cycle a. Name the 10 steps in the accounting cycle. b. Which tasks in the accounting cycle are performed automatically in a computerized accounting system?

Journalizing Closing Entries The following amounts appeared in the Income Statement section of Sunset Surfwear’s worksheet. Instructions In your working papers, record the closing entries for the year ended December 31. Start with general journal page 13. Analyze Identify the effect of the closing entries on the Retained Earnings account.

Journalizing and Posting Closing Entries The following account balances appeared in the Income Statement section of the work sheet of Shutterbug Cameras. Instructions 1. Journalize the closing entries for the year ended December 31. Start with page 14 of a general journal (in your working papers). 2. Post the closing entries to the general ledger accounts, which are included in your working papers. Analyze Describe what would happen if the accountant for Shutterbug Cameras made a mistake and did not close the Transportation In account.

Identifying Accounts for Closing Entries A partial list of the accounts used by Cycle Tech Bicycles appears on page 606. All of the accounts have nonzero balances. Instructions In your working papers, list all account numbers and names for accounts that will be debited when closed. Next, list all account numbers and names for accounts that will be credited when closed. Analyze Examine your list. Determine whether it contains all of the accounts. If it does not, explain why.

Completing End-of-Period Activities The general ledger accounts for River’s Edge Canoe & Kayak as of December 31, the end of the period, appear in the working papers. Instructions In your working papers: 1. Prepare a trial balance on a ten-column work sheet. 2. Complete the work sheet. Use the following adjustment information. Merchandise inventory, December 31 $20,000 Supplies inventory, December 31 900 Unexpired insurance, December 31 1,800 Total federal corporate income taxes for the year 2,965 3. Prepare an income statement from the work sheet information. 4. Prepare a statement of retained earnings. 5. Prepare a balance sheet. 6. Journalize and post the adjusting entries. Begin on general journal page 14. 7. Journalize and post the closing entries. 8. Prepare a post-closing trial balance. Analyze Conclude whether the company made a profit for the year.

Preparing Adjusting and Closing Entries In the middle of the end-of-period activities, the accountant for Buzz Newsstand was called away because of an illness in the family. Before leaving, the accountant prepared the work sheet and the financial statements. However, the business manager can locate only the trial balance shown here (before adjustments) and the income statement shown on page 608. Instructions In your working papers: 1. Journalize the adjusting and closing entries on page 16 of the general journal. 2. Using the information provided, prepare a post-closing trial balance. Analyze Determine the impact of adjusting entries on net income.