Page 184 - Accounting Principles (A Business Perspective)

4. Completing the accounting cycle

Depreciated expense – Buildings 64000
Utilities expense 208000
Dividends 32000
In T-account format, show how journal entries to close the books for the period would be posted. (You do not
need to show the closing journal entries.) Enter these balances in the accounts before doing so. Key the postings
from the first closing entry with the number (1), the second with the number (2), and so on.

Exercise L The following account balances appeared in the Income Statement columns of the work sheet
entries prepared for Liu Company for the year ended 2010 December 31:
Account Titles Income Statement
Debit Credit
Service Revenue 330,000
Advertising Expense 1,350
Salaries Expense 130,000
Utilities Expense 2,250
Insurance Expense 900
Rent Expense 6,750
Supplies Expense 2,250
Depreciation Expense—Equipment 4,500
Interest Expense 562
Interest Revenue 1,125
148,552 331,125
Net Income 182,553
331,125 331,125

Prepare the closing journal entries.
Exercise M Which of the following accounts are likely to appear in the post-closing trial balance for the Blake
Company?
• Accounts Receivable

• Cash
• Service Revenue
• Buildings
• Salaries Expense
• Capital Stock
• Dividends
• Accounts Payable
• Income Summary
• Unearned Subscription Fees

Exercise N Using the legend at the right, determine the category (number) into which you would place each of
these items.
Item Legend
a. Land. 1. Current assets.
b. Marketable securities. 2. Long-term investments.
c. Notes payable, due in three years. 3. Property, plant, and equipment.
d. Taxes withheld from employees. 4. Intangible assets.
e. Patents. 5. Current liabilities.
f. Retained earnings. 6. Long-term liabilities.
g. Unearned subscription fees. 7. Stockholders' equity.

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