LARSON/JENSEN, FUNDAMENTAL ACCOUNTING PRINCIPLES,

TWELFTH CANADIAN EDITION

QUICK STUDY SOLUTIONS CHAPTER FIVE
Quick Study 5-1
1. BS
2. BS
3. IS

4. BS
5. BS
6. IS

Copyright 2007 by McGraw-Hill Ryerson Limited. All rights reserved.

Fundamental Accounting Principles, Twelfth Canadian Edition

Copyright 2007 by McGraw-Hill Ryerson Limited. All rights reserved.

Fundamental Accounting Principles, Twelfth Canadian Edition

Quick Study 5-2

Account
Cash
Accounts
receivable
Supplies
Ed Wolt,
capital
Ed Wolt,
withdrawals
Fees earned
Supplies
expense
Totals
Net income

Unadjuste
d
Trial
Adjustm
Balance
ents
Dr
Cr Dr Cr
15
22
25

10

Adjusted
Trial
Balance
Dr
Cr
15
22
15

40
12
14
88

22
15
40

12

48
88

Income
Statement
Dr
Cr

Balance
Sheet
&
Statement
of
Owner's
Equity
Dr
Cr
15

10
10

10

24
88

40

48
88

48
24
24
24
48

12

48

64

48

64

40
24
64

Quick Study 5-3

Alice Pursley, capital for the December 31, 2011 balance
sheet:
Beginning capital..........................
Add: Net income ($184,000
$125,000).....................................
Less: Withdrawals........................
Ending capital..............................

$50,0
00
59,00
0
32,0
00
$77,0
00

Quick Study 5-4

Sam Hascal, Capital for the December 31, 2011, balance
sheet:
Beginning capital ................$165,000
Less: Net loss ($74,000 $115,000)
Less: Withdrawals .............. 32,000
Ending capital ....................$ 92,000

41,000

Quick Study 5-5

Income Summary
expenses:

balance

after

closing

revenues

and

Revenues: $35,000 + $3,500 ............ =$38,500

Expenses: $19,000 + $4,000 + $2,300
=
25,300
Credit balance .................................. =$13,200
Peter Jontil, Capital balance after all closing entries:
Beginning
balance...........
Add: Net
income...........
Total...............
Less:
Withdrawals....
Ending
balance...........

$14,
000
13,
200
$27, O
200 R
6,
000
$21,
200

Peter Jontil,
Capital
14,000
(Withdra
wals)

Tanvir I Mirza
Notes On Fundamental Accounting Principles.

6,0
00

13,200
21,200

(Beg.
Bal.)
(Net
income)
(End.
Bal.)

Tanvir I Mirza
Notes On Fundamental Accounting Principles.

Copyright 2007 by McGraw-Hill Ryerson Limited. All rights reserved.

Fundamental Accounting Principles, Twelfth Canadian Edition

Quick Study 56
2011
(1)
Apr Revenue..............................
30
Income Summary............
To close the revenue
account.

100
100

(2)

30 Income Summary.................
Expenses........................
To close the expenses
account.

60

(3)

30 Income Summary.................
Capital............................
To close the income
summary to capital.

40

Apr.
30

Assets
2
5
0

Withdrawals
Apr.
2
2 (4)
30
0
0
Balan
ce

0-

Liabilities
30

60

40

Capital
20 Apr.
0 30

Apr.
30
(4 2
) 0

(1)

Revenue
1
10
Apr.
0
0
30
0
-0- Balan
ce

Apr.
30

40 (3)
22 Balan
0 ce

Expenses
6
60 (2)
0

Balan ce
0-

Income Summary
(2) 6
1 (1)
0
0
0
(3) 4
4 Balan
0
0
ce
- Balan
0ce

Copyright 2007 by McGraw-Hill Ryerson Limited. All rights reserved.

Fundamental Accounting Principles, Twelfth Canadian Edition

QS 5-7

Oct.
31

(1)

2011
Oct. Revenue..............................
31
Income Summary............
To close the revenue
account.
31 Income Summary.................
Expenses........................
To close the expenses
account.

140

(3)

31 Capital................................
Income Summary............
To close the income
summary to capital.

40

Assets
2
5
0

0-

100

(2)

Withdrawals
Oct.
2
2 (4)
31
0
0
Balan
ce

100

Liabilities
11
0

Oct.
31

(1)

Copyright 2007 by McGraw-Hill Ryerson Limited. All rights reserved.

Fundamental Accounting Principles, Twelfth Canadian Edition

40

Capital
(4 2
20 Oct.
) 0
0 31
(3 4
) 0

Revenue
1
10
Oct.
0
0
31
0
-0- Balan
ce

140

Oct.
31

14 Balan
0 ce

Expenses
14
14 (2)
0
0

Balan -0ce
7

Income Summary
(2) 1 1 (1)
4 0
0 0
Balan 4 4 (3)
ce 0 0
Balan
ce 0-

Copyright 2007 by McGraw-Hill Ryerson Limited. All rights reserved.

Fundamental Accounting Principles, Twelfth Canadian Edition

Quick Study 5-8

SilverStar Automotive
Post-Closing Trial Balance
October 31, 2011
Account
Debit
Cash..........................................
$
40
Accounts receivable....................
20
Unearned revenue......................
Capital.......................................
Totals.........................................
$ 60

Credit

10
50
$ 60

Quick Study 5-9

1.
2.
3.
4.
5.
6.
7.
8.

(f)
(g)
(a)
(h)
(c)
(e)
(d)
(b)

Journalizing transactions.
Posting the transaction entries.
Preparing the unadjusted trial balance.
Completing the work sheet (optional).
Journalizing and posting adjusting entries.
Preparing the financial statements.
Journalizing and posting closing entries.
Preparing the post-closing trial balance.

Quick Study 5-10

1.
2.
3.
4.

C
E
A
F

5. B
6. A
7. D

QS 5-11
1.
2.
3.
4.
5.

z.
6.
g.
7.
a.
8.
z.
9.
c. 10.

f.
e.
a.
b.
e.

11.
12.
13.
14.
15.

c.
a.
c.
d.
c.

16.
17.
18.
19.
20.

c.
z.
a.
e.
b.

Copyright 2007 by McGraw-Hill Ryerson Limited. All rights reserved.

Fundamental Accounting Principles, Twelfth Canadian Edition

Quick Study 5-12

Jardine Servicing
Partial Balance Sheet
March 31, 2011

Liabilities
Current liabilities
Accounts payable...................

Unearned fees........................
Notes payable, due February
1, 2012............................................
Current portion of mortgage
payable...........................................
Total current liabilities............

$14,0
00
26,00
0
45,00
0
56,0
00

Long-term liabilities
Mortgage payable
(less $56,000 current
portion)...........................................
Total liabilities............................

$141,
000
59,0
00
$200,
000

*Quick Study 5-13

2012
Jan. 1 Rent Revenue...............................
Rent Receivable......................
To reverse accrued revenue.
2 Cash............................................
0
Rent Revenue..........................
To record collection of rent
revenue.

9,800

9,800

15,500
15,500

*Quick Study 5-14

Current assets:
Accounts receivable .........$15,000
Cash ................................ 6,000
Office supplies ................. 1,800
Prepaid insurance ............ 2,500
Total ................................$25,300
Copyright 2007 by McGraw-Hill Ryerson Limited. All rights reserved.
Fundamental Accounting Principles, Twelfth Canadian Edition

Current liabilities:
Accounts payable .............$10,000
Unearned services revenue
4,000
Total ................................$14,000
1.81 is less than the industry
average of 2.2 so compares
$25,300
Current
=
ratio =
$14,000 1.81 unfavourably. However, a
current ratio of 1.81 is generally
considered to be favourable.

Copyright 2007 by McGraw-Hill Ryerson Limited. All rights reserved.

Fundamental Accounting Principles, Twelfth Canadian Edition