1) Reen Lawns, Inc., performs adjusting entries every month, but closes its accounts only at yearend.

The companys year-end adjusted trial balance dated December 31, 2015, was:

GREEN LAWNS, INC.

Adjusted Trial Balance
December 31, 2015
Cash

Accounts

182,200
9,000

receivable
Supplies

600

Equipment

24,000

Accumulated
depreciation:

10,000

equipment
Accounts payable

3,000

Income taxes

7,000

payable
Capital stock

50,000

Retained

90,000

earnings
Dividends

4,000

Lawn care

192,000

revenue earned
Salary expense

104,000

Supply expense

2,400

Advertising

600

expense
Depreciation
expense:

2,000

equipment
Income taxes

23,600

expense
$

352,000

352,000

a-1. Prepare an income statement for the year ended December 31, 2015.

a-2. Prepare a statement of retained earnings for the year ended December 31, 2015.

a-3. Prepare the company's balance sheet dated December 31, 2015. (Amounts to be deducted
should be indicated by a minus sign.)

b. Does the company appear to be liquid?

No
Yes

c. Has the company been profitable in the past?

No
Yes

2) Reen Lawns, Inc., performs adjusting entries every month, but closes its accounts only at year-end.
The companys year-end adjusted trial balance dated December 31, 2015, was:

GREEN LAWNS, INC.

Adjusted Trial Balance
December 31, 2015
Cash
Accounts
receivable
Supplies
Equipment

182,200
9,000
600
24,000

Accumulated
depreciation:

10,000

equipment
Accounts

3,000

payable
Income

7,000

taxes payable
Capital stock

50,000

Retained

90,000

earnings
Dividends

4,000

Lawn care
revenue

192,000

earned
Salary
expense
Supply
expense
Advertising
expense

104,000
2,400
600

Depreciation
expense:
equipment

2,000

Income
taxes

23,200

expense
$

352,000

352,000

a. Prepare all necessary closing entries at December 31, 2015.

1. Record the entry to close Lawn Care Revenue earned to income summary
2. REcord

the entry to close all expense accounts to income summary

3. Record

the entry to transfer net income earned in 2015 to retained

earnings account
4. Record

the entry to close dividends declared in 2015 to retained earnings

account.
Prepare an after-closing trial balance dated December 31, 2015.

Record the entry to close all expense accounts to income summary.

Record the entry to close all expense accounts to income summary.

3) Cat Fancy, Inc., has provided the following information from its most current financial statements:

Total revenue

125,000

Total expenses

80,000

Total current assets

32,000

Total current liabilities

8,000

Total stockholders' equity, January 1, 2015

74,000

Total stockholders' equity, December 31, 2015

76,000

Compute the companys net income percentage in 2015

Compute the companys return on equity in 2015
Compute the companys current ratio at December 31, 2015.

4)
Terrific Temps fills temporary employment positions for local businesses. Some businesses pay in
advance for services; others are billed after services have been performed. Advanced payments are
credited to an account entitled Unearned Fees. Adjusting entries are performed on a monthly basis.
An unadjusted trial balance dated December 31, 2015, follows. (Bear in mind that adjusting entries
have already been made for the first 11 months of 2015, but not for December.)

TERRIFIC TEMPS
UNADJUSTED TRIAL BALANCE
DECEMBER 31, 2015
Cash

27,020

Accounts receivable

59,200

Unexpired insurance

900

Prepaid rent
Office supplies
Equipment

3,000
600
60,000

Accumulated depreciation: equipment

Accounts payable

29,500
4,180

Notes payable

12,000

Interest payable

320

Unearned fees

6,000

Income taxes payable

4,000

Unearned revenue

20,000

Retained earnings

49,000

Capital stock

25,000

Dividends

3,000

Fees earned

75,000

Travel expense

5,000

Insurance expense

2,980

Rent expense

9,900

Office supplies expense

780

Utilities expense

4,800

Depreciation expense: equipment

5,500

Salaries expense

30,000

Interest expense

320

Income taxes expense

12,000

$ 225,000

$ 225,000

Other Data
1. Accrued but unrecorded fees earned as of December 31, 2015, amount to $1,500.
2. Records show that $2,500 of cash receipts originally recorded as unearned fees had been earned as

of December 31.
3. The company purchased a six-month insurance policy on September 1, 2015, for $1,800.
4. On December 1, 2015, the company paid its rent through February 28, 2016.
5. Office supplies on hand at December 31 amount to $400.
6. All equipment was purchased when the business first formed. The estimated life of the equipment at
that time was 10 years (or 120 months).
7. On August 1, 2015, the company borrowed $12,000 by signing a six-month, 8 percent note payable.
The entire note, plus six months' accrued interest, is due on February 1, 2016.
8. Accrued but unrecorded salaries at December 31 amount to $2,700.
9. Estimated income taxes expense for the entire year totals $15,000. Taxes are due in the first quarter
of 2016.

Instructions
a For each of the numbered paragraphs, prepare the necessary adjusting entry
.
1. Record the accrued but uncollected fees earned
2. Record fees earned as of December 31st
3. Record the December insurance expense
4. REcord the December rent expense
5. Record the offices supplies used in December
6. Record the December depreciation expense
7. Record the interest accrued in December
8. Record the salaries accrued in December
9. Record the income taxes accrued in December

B. Determine that amount at which each of the following accounts will be reported in the companys
2015 income statement:
1. FEES EARNED
2. TRAVELS EXPENSE
3. INSURANCE EXPERIENCE
4. RENT EXPENSE

5. OFFICE SUPPLIES EXPERIENCE

6. UTILITIES EXPENSE
7. DEPRECIATION EXPENSE: EQUIPMENT.
8. INTERNET EXPENSE
9. SALARY EXPENSE
10. INCOME TAX EXPENSE.

The unadjusted trial balance reports dividends of $3,000. As of December 31, 2015, have these dividends been paid?
Yes
No