Study Perfect Your Score Score Guide Analyzing ......The Supplies—Office amount in a work sheet’s Trial Balance Debit column represents the value of supplies (A) at the beginning

Name Perfect YourScore Score

Identifying Accounting Concepts and Practices 20 Pts.Analyzing Adjustments on a Work Sheet 12 Pts.

Analyzing Work Sheet Extensions 38 Pts.Total 70 Pts.

StudyGuide

14Part One—Identifying Accounting Concepts and PracticesDirections: Place a T for True or an F for False in the Answers column to showwhether each of the following statements is true or false.

COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING Chapter 14 • 365

1. A stockholder is an owner of one of more shares of a corporation. (p. 405)

2. Owners’ equity accounts for a corporation normally are listed under a major chart ofaccounts division titled Capital Stock. (p. 405)

3. Retained earnings are earnings distributed to stockholders. (p. 405)

4. A dividend is an amount earned by a corporation and not yet distributed tostockholders. (p. 405)

5. A dividends account has a normal debit balance and is increased by a debit. (p. 405)

6. A group of persons elected by the stockholders to manage a corporation is called aboard of directors. (p. 406)

7. A board of directors distributes earnings of a corporation to stockholders by declaring adividend. (p. 406)

8. A declared dividend is classified as an expense. (p. 406)

9. The accounts used to record the declaration of a dividend are Dividends Payable andDividends Expense. (p. 406)

10. When a declared dividend is paid, Dividends Payable is debited. (p. 407)

11. The purpose of a work sheet is to plan adjustments and summarize the informationnecessary to prepare financial statements. (p. 409)

12. The Prepaid Insurance account is adjusted to show the value of insurance that has beenused. (p. 413)

13. During a fiscal period, the amount of merchandise on hand increases and decreases. (p. 415)

14. Most accounts needing adjustment at the end of a fiscal period have a related temporaryaccount. (p. 416)

15. The risk of uncollectible accounts should be recorded as an expense in the sameaccounting period that the revenue is earned. (p. 419)

16. The account Allowance for Uncollectible Accounts is a contra account. (p. 419)

17. Many businesses use a percentage of total sales on account to estimate uncollectibleaccounts expense. (p. 420)

18. Assets that will be used for a number of years in the operation of a business are calledcurrent assets. (p. 423)

19. Accumulated depreciation is the depreciation expense that has been recorded since thepurchase of a plant asset. (p. 424)

20. Federal income tax is an expense of a corporation. (p. 427)

Answers1. T

2. F

3. F

4. F

5. T

6. T

7. T

8. F

9. F

10. T

11. T

12. T

13. T

14. T

15. T

16. T

17. T

18. F

19. T

20. T

b-te_14-study-365-368.qxd 11/7/07 3:20 PM Page 365 SECOND REVISED

366 • Working Papers CENTURY 21 ACCOUNTING, 9TH EDITION

Part Two—Analyzing Adjustments on a Work SheetDirections: For each of the following items, select the choice that best completes the statement. Print the letteridentifying your choice in the Answers column.

1. The Supplies—Office amount in a work sheet’s Trial Balance Debit column represents thevalue of supplies (A) at the beginning of a fiscal period (B) used during a fiscal period (C) at the beginning of a fiscal period plus office supplies bought during the fiscal period(D) bought during a fiscal period. (p. 411)

2. The two accounts used to adjust the Office Supplies account are (A) Supplies andPurchases (B) Supplies—Office and Income Summary (C) Supplies—Office and SuppliesExpense—Office (D) Supplies Expense—Office and Income Summary. (p. 411)

3. The portion of the insurance premiums that has expired during a fiscal period is classifiedas (A) a liability (B) an asset (C) an expense (D) capital. (p. 413)

4. The two accounts used to adjust the Prepaid Insurance account are (A) Insurance Expenseand Income Summary (B) Prepaid Insurance and Insurance Expense (C) Prepaid Insuranceand Income Summary (D) Prepaid Insurance Expense and Income Summary. (p. 413)

5. The amount of goods on hand for sale to customers is called (A) inventory (B) purchases(C) sales (D) merchandise inventory. (p. 415)

6. The Merchandise Inventory amount in a work sheet’s Trial Balance Debit columnrepresents the merchandise inventory (A) at the end of a fiscal period (B) at the beginningof a fiscal period (C) purchased during a fiscal period (D) available during a fiscal period.(p. 416)

7. The two accounts used to adjust the Merchandise Inventory account are (A) MerchandiseInventory and Supplies (B) Merchandise Inventory and Purchases (C) MerchandiseInventory and Income Summary (D) Merchandise Inventory and Sales. (p. 416)

8. The Income Summary amount in a work sheet’s Adjustments Debit column represents the(A) decrease in Merchandise Inventory (B) increase in Merchandise Inventory (C) beginningMerchandise Inventory (D) ending Merchandise Inventory. (p. 416)

9. Recording expenses in the accounting period in which the expenses contribute to earningrevenue is an application of the accounting concept (A) Matching Expenses with Revenue(B) Consistent Reporting (C) Historical Cost (D) Adequate Disclosure. (p. 419)

10. The two accounts used to adjust the uncollectible accounts are (A) Uncollectible AccountsExpense and Allowance for Uncollectible Accounts (B) Accounts Receivable andUncollectible Accounts Expense (C) Accounts Receivable and Allowance for UncollectibleAccounts (D) Accounts Receivable and Accounts Receivable Expense. (p. 421)

11. The two accounts used to adjust the depreciation of store equipment are (A) StoreEquipment and Store Equipment Expense (B) Accumulated Depreciation—Store Equipmentand Accumulated Depreciation Expense (C) Accumulated Depreciation—Store Equipmentand Store Equipment Expense (D) Accumulated Depreciation—Store Equipment andDepreciation Expense—Store Equipment. (p. 425)

12. The two accounts used to record the adjustment for federal income tax are (A) FederalIncome Tax Expense and Prepaid Taxes (B) Federal Income Tax Payable and Federal IncomeTax Expense (C) Federal Income Tax Expense and Allowance for Federal Tax Expense (D) Federal Income Tax Expense and Federal Income Tax Adjustments. (p. 429)

Answers

1. C

2. C

3. C

4. B

5. D

6. B

7. C

8. A

9. A

10. A

11. D

12. B


COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING Chapter 14 • 367

Name Date Class

Part Three—Analyzing Work Sheet Extensions (pp. 432–433)Directions: For each account listed below, place a check mark in the column to which amounts are extendedon a work sheet.

Account Title

1. Accounts Payable

2. Accounts Receivable

3. Accumulated Depreciation—Office Equipment

4. Accumulated Depreciation—Store Equipment

5. Advertising Expense

6. Allowance for Uncollectible Accounts

7. Capital Stock

8. Cash

9. Credit Card Fee Expense

10. Dividends

11. Employee Income Tax Payable

12. Health Insurance Premiums Payable

13. Income Summary (ending inventory smaller thanbeginning inventory)

14. Insurance Expense

15. Medicare Tax Payable

16. Merchandise Inventory

17. Miscellaneous Expense

18. Office Equipment

19. Payroll Taxes Expense

20. Petty Cash

21. Prepaid Insurance

22. Purchases

23. Rent Expense

24. Retained Earnings

25. Salary Expense

26. Sales

27. Sales Tax Payable

28. Social Security Tax Payable

29. Store Equipment

30. Supplies Expense—Office

31. Supplies Expense—Store

32. Supplies—Office

33. Supplies—Store

34. Unemployment Tax Payable—Federal

35. Unemployment Tax Payable—State

36. United Way Donations Payable

37. U.S. Savings Bonds Payable

38. Utilities Expense

Debit Credit

�

�

�

�

�

�

�

�

�

�

�

�

�

Debit Credit

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Income Statement Balance Sheet



Name Date Class

WORK TOGETHER, p. 40814-1

Chapter 14 Distributing Dividends and Preparing a Work Sheet for a Merchandising Business • 369

Journalizing dividends

1.

GENERAL JOURNAL PAGE 14

DATE ACCOUNT TITLE DEBIT CREDITDOC.NO.

POST.REF.

1

2

3

4

5

1

2

3

4

5

Dec.20 – –

15 Dividends

Dividends Payable

5 2 5 0 00

5 2 5 0 00

M162

BTE_Ch14-369-392.qxd 11/7/07 3:27 PM Page 369 SECOND REVISED

WORK TOGETHER (concluded)14-1

COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING370 • Working Papers

CA

SH P

AYM

ENTS

JOU

RNA

LP

AG

E21

12

34

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

DA

TE

AC

CO

UN

T T

ITL

E

PU

RC

HA

SE

SD

ISC

OU

NT

CR

ED

IT

CA

SH

CR

ED

IT

Jan.

20 –

–

15D

ivid

ends

Pay

able

CK

.N

O.

PO

ST

.R

EF

.

GE

NE

RA

L

DE

BIT

CR

ED

IT

52

50

005

25

000

5

AC

CO

UN

TS

PA

YA

BL

ED

EB

IT

687

2.


Name Date Class

ON YOUR OWN, p. 40814-1



1.



POST.REF.

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

Dec.20 – –

15 Dividends

Dividends Payable

21 0 0 0 00

21 0 0 0 00

M321


ON YOUR OWN (concluded)14-1


2.

CA

SH P

AYM

ENTS

JOU

RNA

LP

AG

E24

12

34

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

DA

TE

AC

CO

UN

T T

ITL

E

PU

RC

HA

SE

SD

ISC

OU

NT

CR

ED

IT

CA

SH

CR

ED

IT

Jan.

20 –

–

15D

ivid

ends

Pay

able

CK

.N

O.

PO

ST

.R

EF

.

GE

NE

RA

L

DE

BIT

CR

ED

IT

210

00

0021

00

000

5

AC

CO

UN

TS

PA

YA

BL

ED

EB

IT

721


[This page left blank intentionally]



WORK TOGETHER, pp. 414, 418,422, 426, and 436

14-2, 14-3, 14-4, 14-5, and 14-6

14-2 Beginning an 8-column work sheet for a merchandising business14-3 Analyzing and recording an adjustment for merchandise inventory14-4 Analyzing and recording an adjustment for uncollectible accounts expense14-5 Planning and recording adjustments for depreciation14-6 Completing an 8-column work sheet for a merchandising business organized

as a corporation

12

34

AC

CO

UN

T T

ITL

E

TR

IAL

BA

LA

NC

E

DE

BIT

CR

ED

IT

AD

JUS

TM

EN

TS

DE

BIT

CR

ED

IT

INC

OM

E S

TA

TE

ME

NT

DE

BIT

CR

ED

IT

BA

LA

NC

E S

HE

ET

DE

BIT

CR

ED

IT

56

78

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

1 2 3 4 5 6 7 8 9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

184

85

00

30

000

154

85

25

248

75

225

54

85

25

45

78

36

62

00

00

354

87

25

408

49

50

52

484

124

85

25

154

83

25

184

82

28

99

800

77

407

18

103

18

48

35

24

00

16

200

95

000

80

00

75

00

100

00

00

175

00

000

125

77

45

(e)

21

20

00(d

) 138

48

05(a

) 4

82

810

(b)

39

45

25(c

) 5

40

000

(f)

61

20

00

(g)

50

60

00

(h)

5

582

184

85

00

30

000

154

85

25

234

90

420

65

715

63

311

80

000

354

87

25

408

49

50

26

44

84

186

05

25

205

43

25

184

82

28

55

82

99

800

77

407

18

103

18

48

35

24

00

16

200

95

000

80

00

75

00

100

00

00

175

00

000

125

77

45

Cas

h

Pett

y C

ash

Acc

ount

s R

ecei

vabl

e

Allo

w. f

or U

ncol

l. A

ccts

.

Mer

chan

dis

e In

vent

ory

Supp

lies—

Off

ice

Supp

lies—

Stor

e

Prep

aid

Insu

ranc

e

Off

ice

Equ

ipm

ent

Acc

. Dep

r.—

Off

ice

Equi

pmen

t

Stor

e E

quip

men

t

Acc

. Dep

r.—

Stor

e Eq

uipm

ent

Acc

ount

s P

ayab

le

Fed

eral

Inco

me

Tax

Pay

able

Emp.

Inco

me

Tax

Pay.

Soci

al S

ecur

ity

Tax

Pay

able

Med

icar

e T

ax P

ayab

le

Sale

s T

ax P

ayab

le

Une

mpl

oym

ent T

ax P

ay.—

Fed.

Une

mpl

oym

ent T

ax P

ay.—

Stat

e

Hea

lth

Ins.

Pre

miu

ms

Pay.

U.S

. Sav

ings

Bon

ds

Paya

ble

Uni

ted

Way

Don

atio

ns P

ay.

Div

iden

ds

Paya

ble

Cap

ital

Sto

ck

Ret

aine

d E

arni

ngs

Coa

stal

Aqu

atic

s

Wor

k Sh

eet

For

Yea

r E

nded

Dec

embe

r 31

, 20

– –

Before Federal Income TaxTotal of Income Statement Credit column $859,940.34Total of Income Statement Debit column $714,284.40Net Income Before Federal Income Tax $145,655.94


Name Date Class


WORK TOGETHER (concluded)14-2, 14-3, 14-4, 14-5, and 14-6

12

34

AC

CO

UN

T T

ITL

E

TR

IAL

BA

LA

NC

E

DE

BIT

CR

ED

IT

AD

JUS

TM

EN

TS

DE

BIT

CR

ED

IT

INC

OM

E S

TA

TE

ME

NT

DE

BIT

CR

ED

IT

BA

LA

NC

E S

HE

ET

DE

BIT

CR

ED

IT

56

78

27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

210

00

00

64

825

81

57

27

389

18

401

152

80

00

12

85

64

82

27

45

68

97

161

84

25

240

00

00

204

18

085

42

64

28

400

00

00

1,109

58

586

845

82

809

46

15

25

94

97

00

1,109

58

586

(d) 13

84

805

(f)

61

20

00(g

) 5

06

000

(c)

54

00

00

(a)

48

28

10(b

) 3

94

525

(e)

21

20

00

(h)

5

582

413

77

2241

37

722

138

48

05

64

825

81

57

27

389

18

401

152

80

00

12

85

64

82

27

61

20

00

50

60

00

54

00

00

45

68

97

161

84

25

240

00

00

204

18

085

48

28

10

39

45

25

21

20

00

42

64

28

400

55

82

754

34

022

105

60

012

859

94

034

845

82

809

46

15

25

94

97

00

859

94

034

859

94

034

210

00

00

368

60

146

368

60

146

263

00

134

105

60

012

368

60

146

Div

iden

ds

Inco

me

Sum

mar

y

Sale

s

Sale

s D

isco

unt

Sale

s R

etur

ns a

nd A

llow

ance

s

Pur

chas

es

Purc

hase

s D

isco

unt

Purc

h. R

etur

ns a

nd A

llow

ance

s

Ad

vert

isin

g E

xpen

se

Cas

h Sh

ort a

nd O

ver

Cre

dit

Car

d F

ee E

xpen

se

Dep

r. Ex

p.—

Off

ice

Equi

pmen

t

Dep

r. E

xp.—

Stor

e Eq

uipm

ent

Insu

ranc

e E

xpen

se

Mis

cella

neou

s E

xpen

se

Payr

oll T

axes

Exp

ense

Ren

t Exp

ense

Sala

ry E

xpen

se

Supp

lies

Exp

ense

—O

ffic

e

Supp

lies

Exp

ense

—St

ore

Unc

olle

ctib

le A

ccou

nts

Exp

.

Uti

litie

s E

xpen

se

Fed

. Inc

ome

Tax

Exp

ense

Net

Inco

me a

fter

Fed

. Inc

ome T

ax

Coa

stal

Aqu

atic

s

Wor

k Sh

eet

For

Yea

r E

nded

Dec

embe

r 31

, 20

– –

Federal Income Tax Rate TaxFirst $50,000 15% $ 7,500.00Next $25,000 25% $ 6,250.00Next $25,000 34% $ 8,500.00$145,655.94 � $100,000.00 � $45,655.94 39% $17,805.82Total Federal Income Tax $40,055.82



ON YOUR OWN, pp. 414, 418,422, 426, and 436

14-2, 14-3, 14-4, 14-5, and 14-6

14-2 Beginning an 8-column work sheet for a merchandising business14-3 Analyzing and recording an adjustment for merchandise inventory14-4 Analyzing and recording an adjustment for uncollectible accounts expense14-5 Planning and recording adjustments for depreciation14-6 Completing an 8-column work sheet for a merchandising business organized

as a corporation

12

34

AC

CO

UN

T T

ITL

E

TR

IAL

BA

LA

NC

E

DE

BIT

CR

ED

IT

AD

JUS

TM

EN

TS

DE

BIT

CR

ED

IT

INC

OM

E S

TA

TE

ME

NT

DE

BIT

CR

ED

IT

BA

LA

NC

E S

HE

ET

DE

BIT

CR

ED

IT

56

78

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

1 2 3 4 5 6 7 8 9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

170

58

25

50

000

256

09

70

264

24

884

24

83

28

51

81

94

120

00

00

321

84

25

451

84

98

64

829

184

74

00

214

48

00

221

54

17

12

15

00

87

742

20

520

35

15

00

24

00

16

200

10

20

00

10

000

12

000

120

00

00

210

00

000

909

62

38

(e)

18

50

00(d

) 3

15

887

(a)

18

49

67(b

) 4

19

858

(c)

90

00

00

(f)

51

84

00

(g)

64

80

00

(h)

27

83

58

170

58

25

50

000

256

09

70

261

08

997

63

361

98

336

30

00

00

321

84

25

451

84

98

24

98

29

236

58

00

279

28

00

221

54

17

27

83

58

12

15

00

87

742

20

520

35

15

00

24

00

16

200

10

20

00

10

000

12

000

120

00

00

210

00

000

909

62

38

Cas

h

Pett

y C

ash

Acc

ount

s R

ecei

vabl

e

Allo

w. f

or U

ncol

l. A

ccts

.

Mer

chan

dis

e In

vent

ory

Supp

lies—

Off

ice

Supp

lies—

Stor

e

Pre

paid

Ins

uran

ce

Off

ice

Equ

ipm

ent

Acc

. Dep

r.—

Off

ice

Equi

pmen

t

Stor

e E

quip

men

t

Acc

. Dep

r.—

Stor

e Eq

uipm

ent

Acc

ount

s Pa

yabl

e

Fed

eral

Inco

me

Tax

Pay

able

Emp.

Inco

me

Tax

Pay.

Soci

al S

ecur

ity

Tax

Pay

able

Med

icar

e T

ax P

ayab

le

Sale

s T

ax P

ayab

le

Une

mpl

oym

ent T

ax P

ay.—

Fed.

Une

mpl

oym

ent T

ax P

ay.—

Stat

e

Hea

lth

Ins.

Pre

miu

ms

Pay.

U.S

. Sav

ings

Bon

ds

Paya

ble

Uni

ted

Way

Don

atio

ns P

ay.

Div

iden

ds

Paya

ble

Cap

ital

Sto

ck

Ret

aine

d E

arni

ngs

Sono

ma

Tre

asur

es

Wor

k Sh

eet

For

Yea

r E

nded

Dec

embe

r 31

, 20

– –

Before Federal Income TaxTotal of Income Statement Credit column $937,547.54Total of Income Statement Debit column $847,742.88Net Income Before Federal Income Tax $ 89,804.66


Name Date Class


ON YOUR OWN (concluded)14-2, 14-3, 14-4, 14-5, and 14-6

12

34

AC

CO

UN

T T

ITL

E

TR

IAL

BA

LA

NC

E

DE

BIT

CR

ED

IT

AD

JUS

TM

EN

TS

DE

BIT

CR

ED

IT

INC

OM

E S

TA

TE

ME

NT

DE

BIT

CR

ED

IT

BA

LA

NC

E S

HE

ET

DE

BIT

CR

ED

IT

56

78

27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

840

00

00

71

525

69

42

28

482

10

166

132

50

00

11

18

124

51

27

84

02

00

214

82

88

300

00

00

234

18

225

64

82

99

160

00

00

1,320

47

300

925

18

320

42

15

35

81

48

99

1,320

47

300

(d)

31

58

87

(f)

51

84

00(g

) 6

48

000

(c)

90

00

00

(a)

18

49

67(b

) 4

19

858

(e)

18

50

00

(h)

27

83

58

345

04

7034

50

470

31

58

87

71

525

69

42

28

482

10

166

132

50

00

11

18

124

51

27

51

84

00

64

80

00

90

00

00

84

02

00

214

82

88

300

00

00

234

18

225

18

49

67

41

98

58

18

50

00

64

82

99

187

83

58

866

52

646

710

21

08

937

54

754

925

18

320

42

15

35

81

48

99

937

54

754

937

54

754

840

00

00

470

24

412

470

24

412

399

22

304

710

21

08

470

24

412

Div

iden

ds

Inco

me

Sum

mar

y

Sale

s

Sale

s D

isco

unt

Sale

s R

etur

ns a

nd A

llow

ance

s

Purc

hase

s

Purc

hase

s D

isco

unt

Purc

h. R

etur

ns a

nd A

llow

ance

s

Ad

vert

isin

g E

xpen

se

Cas

h Sh

ort a

nd O

ver

Cre

dit

Car

d F

ee E

xpen

se

Dep

r. Ex

p.—

Off

ice

Equi

pmen

t

Dep

r. E

xp.—

Stor

e Eq

uipm

ent

Insu

ranc

e E

xpen

se

Mis

cella

neou

s E

xpen

se

Payr

oll T

axes

Exp

ense

Ren

t E

xpen

se

Sala

ry E

xpen

se

Supp

lies

Exp

ense

—O

ffic

e

Supp

lies

Exp

ense

—St

ore

Unc

olle

ctib

le A

ccou

nts

Exp

.

Uti

litie

s E

xpen

se

Fed

. Inc

ome

Tax

Exp

ense

Net

Inco

me a

fter

Fed

. Inc

ome T

ax

Sono

ma

Tre

asur

es

Wor

k Sh

eet

For

Yea

r E

nded

Dec

embe

r 31

, 20

– –

Federal Income Tax Rate TaxFirst $50,000 15% $ 7,500.00Next $25,000 25% $ 6,250.00$89,804.66 � $75,000.00 � $14,804.66 34% $ 5,033.58Total Federal Income Tax $18,783.58



WO

RK

TO

GET

HER

, p.

426

14-5

Pla

nnin

g a

nd r

ecord

ing a

dju

stm

ents

for

dep

reci

ation

Ori

gina

l Cos

t$1

,600

.00

Est

imat

ed S

alva

ge V

alue

100.

00E

stim

ated

Tot

al D

epre

ciat

ion

Exp

ense

$1,5

00.0

0 �

5 Y

ears

of

Est

imat

ed U

sefu

l Lif

e �

$300

.00

Ann

ual D

epre

ciat

ion

Exp

ense

1.

2.

Ori

gina

l Cos

t$1

,600

.00

Dep

reci

atio

n:Y

ear

1

$300

.00

Yea

r 2

30

0.00

600.

00B

ook

Val

ue$1

,000

.00

ON

YO

UR O

WN

, p.

426

14-5

Pla

nnin

g a

nd r

ecord

ing a

dju

stm

ents

for

dep

reci

ation

Ori

gina

l Cos

t$2

,350

.00

Est

imat

ed S

alva

ge V

alue

600.

00E

stim

ated

Tot

al D

epre

ciat

ion

Exp

ense

$1,7

50.0

0 �

7 Y

ears

of

Est

imat

ed U

sefu

l Lif

e �

$250

.00

Ann

ual D

epre

ciat

ion

Exp

ense

1.

2.

Ori

gina

l Cos

t$2

,350

.00

Dep

reci

atio

n:Y

ear

1

$250

.00

Yea

r 2

25

0.00

Yea

r 3

25

0.00

750.

00B

ook

Val

ue$1

,600

.00


Name Date Class


APPLICATION PROBLEM, p. 43814-1


1.



POST.REF.

1

2

3

4

5

6

7

1

2

3

4

5

6

7

Dec.20 – –

15 Dividends

Dividends Payable

3 1 5 0 00

3 1 5 0 00

M258



APPLICATION PROBLEM (concluded)14-1

2.

CA

SH P

AYM

ENTS

JOU

RNA

LP

AG

E28

12

34

1 2 3 4 5 6 7 8

1 2 3 4 5 6 7 8

DA

TE

AC

CO

UN

T T

ITL

E

PU

RC

HA

SE

SD

ISC

OU

NT

CR

ED

IT

CA

SH

CR

ED

IT

Jan.

20 –

–

15D

ivid

ends

Pay

able

CK

.N

O.

PO

ST

.R

EF

.

GE

NE

RA

L

DE

BIT

CR

ED

IT

31

50

003

15

000

5

AC

CO

UN

TS

PA

YA

BL

ED

EB

IT

721





APPLICATION PROBLEMS pp. 438–44014-2, 14-3, 14-4, 14-5, and 14-6

14-2 Beginning an 8-column work sheet for a merchandising business14-3 Analyzing and recording a merchandise inventory adjustment on a work sheet14-4 Analyzing and recording an allowance for uncollectible accounts adjustment on a

work sheet14-5 Planning and recording adjustments for depreciation14-6 Calculating federal income tax and completing an 8-column work sheet for a

merchandising business

12

34

AC

CO

UN

T T

ITL

E

TR

IAL

BA

LA

NC

E

DE

BIT

CR

ED

IT

AD

JUS

TM

EN

TS

DE

BIT

CR

ED

IT

INC

OM

E S

TA

TE

ME

NT

DE

BIT

CR

ED

IT

BA

LA

NC

E S

HE

ET

DE

BIT

CR

ED

IT

56

78

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

1 2 3 4 5 6 7 8 9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

175

60

75

30

000

147

10

98

236

31

463

52

10

98

43

49

44

60

00

00

337

12

88

388

07

02

49

859

118

60

98

147

09

08

175

58

16

94

810

72

441

16

942

17

55

93

24

00

16

200

90

250

76

00

71

25

31

50

00

525

00

00

966

89

21

(e)

19

88

00(d

) 9

54

825

(a)

47

21

25(b

) 3

64

825

(c)

55

00

00

(f)

58

50

00

(g)

52

50

00

(h)

51

61

91

175

60

75

30

000

147

10

98

226

76

638

48

973

70

119

50

000

337

12

88

388

07

02

24

86

59

177

10

98

199

59

08

175

58

16

51

61

91

94

810

72

441

16

942

17

55

93

24

00

16

200

90

250

76

00

71

25

31

50

00

525

00

00

966

89

21

Cas

h

Pett

y C

ash

Acc

ount

s R

ecei

vabl

e

Allo

w. f

or U

ncol

l. A

ccts

.

Mer

chan

dis

e In

vent

ory

Supp

lies

—O

ffic

e

Supp

lies—

Stor

e

Prep

aid

Insu

ranc

e

Off

ice

Equ

ipm

ent

Acc

. Dep

r.—

Off

ice

Equi

pmen

t

Stor

e E

quip

men

t

Acc

. Dep

r.—

Stor

e Eq

uipm

ent

Acc

ount

s P

ayab

le

Fed

eral

Inco

me

Tax

Pay

able

Emp.

Inco

me

Tax

Pay.

Soci

al S

ecur

ity

Tax

Pay

able

Med

icar

e T

ax P

ayab

le

Sale

s T

ax P

ayab

le

Une

mpl

oym

ent T

ax P

ay.—

Fed.

Une

mpl

oym

ent T

ax P

ay.—

Stat

e

Hea

lth

Ins.

Pre

miu

ms

Pay.

U.S

. Sav

ings

Bon

ds

Paya

ble

Uni

ted

Way

Don

atio

ns P

ay.

Div

iden

ds

Paya

ble

Cap

ital

Sto

ck

Ret

aine

d E

arni

ngs

Bra

nson

Am

usem

ent C

ompa

ny

Wor

k Sh

eet

For

Yea

r E

nded

Dec

embe

r 31

, 20

– –




APPLICATION PROBLEMS (concluded)14-2, 14-3, 14-4, 14-5, and 14-6

12

34

AC

CO

UN

T T

ITL

E

TR

IAL

BA

LA

NC

E

DE

BIT

CR

ED

IT

AD

JUS

TM

EN

TS

DE

BIT

CR

ED

IT

INC

OM

E S

TA

TE

ME

NT

DE

BIT

CR

ED

IT

BA

LA

NC

E S

HE

ET

DE

BIT

CR

ED

IT

56

78

27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

126

00

00

25

15

25

84

82

25

369

72

480

145

16

00

772

61

58

15

43

45

00

153

75

03

228

00

00

193

97

180

40

51

06

480

00

00

1,059

51

374

843

53

668

51

55

28

90

22

15

1,059

51

374

(d)

95

48

25

(f)

58

50

00(g

) 5

25

000

(c)

55

00

00

(a)

47

21

25(b

) 3

64

825

(e)

19

88

00

(h)

51

61

91

416

67

6641

66

766

95

48

25

25

15

25

84

82

25

369

72

480

145

16

00

772

61

58

15

58

50

00

52

50

00

55

00

00

43

45

00

153

75

03

228

00

00

193

97

180

47

21

25

36

48

25

19

88

00

40

51

06

531

61

91

731

61

472

126

09

939

857

71

411

843

53

668

51

55

28

90

22

15

857

71

411

857

71

411

126

00

00

346

14

893

346

14

893

220

04

954

126

09

939

346

14

893

Div

iden

ds

Inco

me

Sum

mar

y

Sale

s

Sale

s D

isco

unt

Sale

s R

etur

ns a

nd A

llow

ance

s

Purc

hase

s

Pur

chas

es D

isco

unt

Purc

h. R

etur

ns a

nd A

llow

ance

s

Ad

vert

isin

g E

xpen

se

Cas

h Sh

ort a

nd O

ver

Cre

dit

Car

d F

ee E

xpen

se

Dep

r. Ex

p.—

Off

ice

Equi

pmen

t

Dep

r. E

xp.—

Stor

e Eq

uipm

ent

Insu

ranc

e E

xpen

se

Mis

cella

neou

s E

xpen

se

Payr

oll T

axes

Exp

ense

Ren

t Exp

ense

Sala

ry E

xpen

se

Supp

lies

Exp

ense

—O

ffic

e

Supp

lies

Exp

ense

—St

ore

Unc

olle

ctib

le A

ccou

nts

Exp

.

Uti

litie

s E

xpen

se

Fed

. Inc

ome

Tax

Exp

ense

Net

Inco

me a

fter

Fed

. Inc

ome T

ax

Bra

nson

Am

usem

ent C

ompa

ny

Wor

k Sh

eet

For

Yea

r E

nded

Dec

embe

r 31

, 20

– –


Name Date Class



APPLI

CA

TIO

N P

RO

BLE

M,

p.

439

14-5

Pla

nnin

g a

nd r

ecord

ing a

dju

stm

ents

for

dep

reci

ation

Ori

gina

l Cos

t$1

0,54

0.00

Est

imat

ed S

alva

ge V

alue

2,50

0.00

Est

imat

ed T

otal

Dep

reci

atio

n E

xpen

se$

8,04

0.00

�3

Yea

rs o

f E

stim

ated

Use

ful L

ife

�$2

,680

.00

Ann

ual D

epre

ciat

ion

Exp

ense

1.

2.

Ori

gina

l Cos

t$1

0,54

0.00

Dep

reci

atio

n:Y

ear

1

$2,6

80.0

0Y

ear

2

2,68

0.00

5,36

0.00

Boo

k V

alue

$5,

180.

00

Wav

e D

ivin

g C

ompa

ny s

cuba

tes

ting

equ

ipm

ent:





MASTERY PROBLEM, p. 44014-7

Pre

pari

ng a

n 8

-colu

mn w

ork

shee

t fo

r a m

erch

andis

ing b

usi

nes

s

12

34

AC

CO

UN

T T

ITL

E

TR

IAL

BA

LA

NC

E

DE

BIT

CR

ED

IT

AD

JUS

TM

EN

TS

DE

BIT

CR

ED

IT

INC

OM

E S

TA

TE

ME

NT

DE

BIT

CR

ED

IT

BA

LA

NC

E S

HE

ET

DE

BIT

CR

ED

IT

56

78

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

1 2 3 4 5 6 7 8 9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

285

48

25

50

000

325

18

28

229

28

236

61

28

25

42

18

36

120

00

00

281

87

25

428

41

05

15

525

51

58

25

124

83

25

215

43

20

12

48

25

82

200

19

224

24

15

25

33

60

22

680

96

000

75

00

10

000

110

00

00

550

00

00

172

98

013

(c)

95

48

25

(d)

54

98

40

(a)

47

21

25(b

) 3

64

825

(e) 10

00

000

(f)

52

16

00

(g)

48

20

00

(h)

30

05

22

285

48

25

50

000

325

18

28

238

83

061

14

07

00

57

011

20

00

00

281

87

25

428

41

05

56

53

65

103

74

25

173

03

25

215

43

20

30

05

22

12

48

25

82

200

19

224

24

15

25

33

60

22

680

96

000

75

00

10

000

110

00

00

550

00

00

172

98

013

Cas

h

Pett

y C

ash

Acc

ount

s R

ecei

vabl

e

Allo

w. f

or U

ncol

l. A

ccts

.

Mer

chan

dis

e In

vent

ory

Supp

lies—

Off

ice

Supp

lies—

Stor

e

Prep

aid

Insu

ranc

e

Off

ice

Equ

ipm

ent

Acc

. Dep

r.—

Off

ice

Equi

pmen

t

Stor

e E

quip

men

t

Acc

. Dep

r.—

Stor

e Eq

uipm

ent

Acc

ount

s Pa

yabl

e

Fed

eral

Inco

me

Tax

Pay

able

Emp.

Inco

me

Tax

Pay.

Soci

al S

ecur

ity

Tax

Pay

able

Med

icar

e T

ax P

ayab

le

Sale

s T

ax P

ayab

le

Une

mpl

oym

ent T

ax P

ay.—

Fed.

Une

mpl

oym

ent T

ax P

ay.—

Stat

e

Hea

lth

Ins.

Pre

miu

ms

Pay.

U.S

. Sav

ings

Bon

ds

Paya

ble

Uni

ted

Way

Don

atio

ns P

ay.

Div

iden

ds

Paya

ble

Cap

ital

Sto

ck

Ret

aine

d E

arni

ngs

Car

ol’s

Clo

set

Wor

k Sh

eet

For

Yea

r E

nded

Dec

embe

r 31

, 20

– –



Name Date Class


MASTERY PROBLEM (concluded)14-7

12

34

AC

CO

UN

T T

ITL

E

TR

IAL

BA

LA

NC

E

DE

BIT

CR

ED

IT

AD

JUS

TM

EN

TS

DE

BIT

CR

ED

IT

INC

OM

E S

TA

TE

ME

NT

DE

BIT

CR

ED

IT

BA

LA

NC

E S

HE

ET

DE

BIT

CR

ED

IT

56

78

27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

440

00

00

31

54

15

71

48

15

489

33

554

160

25

00

725

70

15

95

50

98

00

181

52

25

280

00

00

193

97

180

48

18

88

440

00

00

1,244

95

077

948

48

425

50

15

25

70

58

05

1,244

95

077

(f)

52

16

00(g

) 4

82

000

(e) 10

00

000

(a)

47

21

25(b

) 3

64

825

(d)

54

98

40

(h)

30

05

22

464

57

37

(c)

95

48

25

464

57

37

31

54

15

71

48

15

489

33

554

160

25

00

725

70

15

95

52

16

00

48

20

00

100

00

00

50

98

00

181

52

25

280

00

00

193

97

180

47

21

25

36

48

25

54

98

40

48

18

88

470

05

22

853

63

609

116

46

971

970

10

580

95

48

25

948

48

425

50

15

25

70

58

05

970

10

580

970

10

580

440

00

00

419

40

255

419

40

255

302

93

284

116

46

971

419

40

255

Div

iden

ds

Inco

me

Sum

mar

y

Sale

s

Sale

s D

isco

unt

Sale

s R

etur

ns a

nd A

llow

ance

s

Purc

hase

s

Purc

hase

s D

isco

unt

Purc

h. R

etur

ns a

nd A

llow

ance

s

Ad

vert

isin

g E

xpen

se

Cas

h Sh

ort a

nd O

ver

Cre

dit

Car

d F

ee E

xpen

se

Dep

r. Ex

p.—

Off

ice

Equi

pmen

t

Dep

r. E

xp.—

Stor

e Eq

uipm

ent

Insu

ranc

e E

xpen

se

Mis

cella

neou

s E

xpen

se

Payr

oll T

axes

Exp

ense

Ren

t Exp

ense

Sala

ry E

xpen

se

Supp

lies

Exp

ense

—O

ffic

e

Supp

lies

Exp

ense

—St

ore

Unc

olle

ctib

le A

ccou

nts

Exp

.

Uti

litie

s E

xpen

se

Fed

. Inc

ome

Tax

Exp

ense

Net

Inco

me a

fter

Fed

. Inc

ome T

ax

Car

ol’s

Clo

set

Wor

k Sh

eet

For

Yea

r E

nded

Dec

embe

r 31

, 20

– –



8 CHALLENGE PROBLEM, p. 44014-8


Preparing a 10-column work sheet for a merchandising business

1 2 3 4

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

ACCOUNT TITLE TRIAL BALANCE

DEBIT CREDIT

ADJUSTMENTS

DEBIT CREDIT

Cash

Petty Cash

Accounts Receivable

Allow. for Uncoll. Accts.

Merchandise Inventory

Supplies—Office

Supplies—Store

Prepaid Insurance

Office Equipment

Acc. Depr.—Office Equipment

Store Equipment

Acc. Depr.—Store Equipment

Accounts Payable

Federal Income Tax Payable

Emp. Income Tax Pay.—Federal

Social Security Tax Payable

Medicare Tax Payable

Sales Tax Payable

Unemployment Tax Pay.—Fed.

Unemployment Tax Pay.—State

Health Ins. Premiums Pay.

U.S. Savings Bonds Payable

United Way Donations Pay.

Dividends Payable

Capital Stock

Retained Earnings

14 2 5 8 25

2 5 0 00

16 4 8 5 25

169 1 5 8 66

3 1 8 4 67

2 4 1 5 29

12 0 0 0 00

28 1 8 7 25

32 1 8 4 84

2 5 1 25

12 1 8 2 00

16 1 8 4 00

12 4 8 2 36

1 2 4 8 25

5 1 1 83

1 1 9 70

1 2 1 5 25

2 5 60

1 7 2 80

5 6 0 00

2 0 00

6 0 00

12 0 0 0 00

150 0 0 0 00

22 1 0 8 43

(d) 1 5 8 9 00(c) 2 1 5 8 20(a) 2 8 4 1 25(b) 2 1 0 5 88(e) 9 0 0 0 00

(f) 3 8 9 0 00

(g) 3 4 6 0 00

(h) 8 2 9 06

Hillside Ski Shop

Work Sheet

For Year Ended December 31, 20 – –

Before Federal Income TaxTotal of Income Statement Credit column $513,856.01Total of Income Statement Debit column $423,917.60Net Income Before Federal Income Tax $ 89,938.41


Name Date Class


8 CHALLENGE PROBLEM (continued)14-8

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

14 2 5 8 25

2 5 0 00

16 4 8 5 25

167 0 0 0 46

3 4 3 42

3 0 9 41

3 0 0 0 00

28 1 8 7 25

32 1 8 4 84

1 8 4 0 25

16 0 7 2 00

19 6 4 4 00

12 4 8 2 36

8 2 9 06

1 2 4 8 25

5 1 1 83

1 1 9 70

1 2 1 5 25

2 5 60

1 7 2 80

5 6 0 00

2 0 00

6 0 00

12 0 0 0 00

150 0 0 0 00

22 1 0 8 43

14 2 5 8 25

2 5 0 00

16 4 8 5 25

167 0 0 0 46

3 4 3 42

3 0 9 41

3 0 0 0 00

28 1 8 7 25

32 1 8 4 84

1 8 4 0 25

16 0 7 2 00

19 6 4 4 00

12 4 8 2 36

8 2 9 06

1 2 4 8 25

5 1 1 83

1 1 9 70

1 2 1 5 25

2 5 60

1 7 2 80

5 6 0 00

2 0 00

6 0 00

12 0 0 0 00

150 0 0 0 00

22 1 0 8 43

ADJUSTED TRIAL BALANCE

DEBIT CREDIT

INCOME STATEMENT

DEBIT CREDIT

BALANCE SHEET

DEBIT CREDIT

5 6 7 8 9 10


CHALLENGE PROBLEM (continued)14-8


1 2 3 4

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

ACCOUNT TITLE TRIAL BALANCE

DEBIT CREDIT

ADJUSTMENTS

DEBIT CREDIT

Dividends

Income Summary

Sales

Sales Discount

Sales Returns and Allowances

Purchases

Purchases Discount

Purch. Returns and Allowances

Advertising Expense

Cash Short and Over

Credit Card Fee Expense

Depr. Exp.—Office Equipment

Depr. Exp.—Store Equipment

Insurance Expense

Miscellaneous Expense

Payroll Taxes Expense

Rent Expense

Salary Expense

Supplies Expense—Office

Supplies Expense—Store

Uncollectible Accounts Exp.

Utilities Expense

Fed. Income Tax Expense

Net Income after Fed. Income Tax

48 0 0 0 00

1 5 4 8 81

2 1 8 4 94

204 8 4 0 10

12 5 0 0 00

8 04

2 4 8 4 10

4 1 5 0 00

12 1 8 4 20

24 0 0 0 00

130 1 5 4 20

4 8 1 8 88

18 0 0 0 00

742 9 9 7 48

508 2 1 8 88

2 4 8 9 05

3 1 4 8 08

742 9 9 7 48

(c) 2 1 5 8 20

(f) 3 8 9 0 00(g) 3 4 6 0 00(e) 9 0 0 0 00

(a) 2 8 4 1 25(b) 2 1 0 5 88(d) 1 5 8 9 00

(h) 8 2 9 06

25 8 7 3 39 25 8 7 3 39

Hillside Ski Shop

Work Sheet

For Year Ended December 31, 20 – –

Federal Income Tax Rate TaxFirst $50,000 15% $ 7,500.00Next $25,000 25% $ 6,250.00$89,938.41 � $75,000.00 � $14,938.41 34% $ 5,079.06Total Federal Income Tax $18,829.06


Name Date Class

CHALLENGE PROBLEM (concluded)14-8


27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

48 0 0 0 00

2 1 5 8 20

1 5 4 8 81

2 1 8 4 94

204 8 4 0 10

12 5 0 0 00

8 04

2 4 8 4 10

3 8 9 0 00

3 4 6 0 00

9 0 0 0 00

4 1 5 0 00

12 1 8 4 20

24 0 0 0 00

130 1 5 4 20

2 8 4 1 25

2 1 0 5 88

1 5 8 9 00

4 8 1 8 88

18 8 2 9 06

752 7 6 5 54

508 2 1 8 88

2 4 8 9 05

3 1 4 8 08

752 7 6 5 54

2 1 5 8 20

1 5 4 8 81

2 1 8 4 94

204 8 4 0 10

12 5 0 0 00

8 04

2 4 8 4 10

3 8 9 0 00

3 4 6 0 00

9 0 0 0 00

4 1 5 0 00

12 1 8 4 20

24 0 0 0 00

130 1 5 4 20

2 8 4 1 25

2 1 0 5 88

1 5 8 9 00

4 8 1 8 88

18 8 2 9 06

442 7 4 6 66

71 1 0 9 35

513 8 5 6 01

508 2 1 8 88

2 4 8 9 05

3 1 4 8 08

513 8 5 6 01

513 8 5 6 01

48 0 0 0 00

310 0 1 8 88

310 0 1 8 88

238 9 0 9 53

71 1 0 9 35

310 0 1 8 88

ADJUSTED TRIAL BALANCE

DEBIT CREDIT

INCOME STATEMENT

DEBIT CREDIT

BALANCE SHEET

DEBIT CREDIT

5 6 7 8 9 10



Documents

Study Perfect Your Score Score Guide Analyzing ......The Supplies—Office amount in a work sheet’s Trial Balance Debit column represents the value of supplies (A) at the beginning