Quick Cleaners, Inc. (QCI) has been in business for several years. It specializes in cleaning houses but has some small business clients as well. a. Incurred $600 of heating and electrical costs this month and will pay them next month. b. Issued $25,000 of QCI stock for cash. c. Paid wages for the current month, totalling $2,000. d. Performed cleaning services on account worth $2,800. e. Some of Quick Cleaners’s equipment was repaired at a total cost of $150. The company paid the full amount immediately. Required: Prepare journal entries for the above transactions, which occurred during a recent month. (Omit the "$" sign in your response.) Event General Journal Debit Credit a. Utilities expense Accounts payable b. Cash Contributed capital c. Wages expense Cash d. Accounts receivable Services/cleaning revenue e. Repairs and maintenance expense Cash

Quick Cleaners, Inc. (QCI) has been in business for several years. It specializes in cleaning houses but has some small business clients as well.  

a.	Incurred $600 of heating and electrical costs this month and will pay them next month.
b.	Issued $25,000 of QCI stock for cash.
c.	Paid wages for the current month, totalling $2,000.
d.	Performed cleaning services on account worth $2,800.
e.	Some of Quick Cleaners’s equipment was repaired at a total cost of $150. The company paid the full amount immediately.

Required:

Prepare journal entries for the above transactions, which occurred during a recent month. (Omit the "$" sign in your response.)

 

Event	General Journal	Debit	Credit
a.	Utilities expense
	Accounts payable
b.	Cash
	Contributed capital
c.	Wages expense
	Cash
d.	Accounts receivable
	Services/cleaning revenue
e.	Repairs and maintenance expense
	Cash

 

The Sky Blue Corporation has the following adjusted trial balance at December 31, 2009. Debit Credit Cash $ 1,790 Accounts Receivable 2,440 Prepaid Insurance 2,300 Notes Receivable 2,300 Equipment 13,200 Accumulated Depreciation $ 400 Accounts Payable 1,200 Accrued Liabilities Payable 3,090 Wages Payable 1,170 Income Taxes Payable 2,100 Unearned Rent Revenue 790 Contributed Capital 2,500 Retained Earnings 1,400 Dividends Declared 170 Sales Revenue 41,120 Rent Revenue 360 Wages Expense 18,300 Depreciation Expense 400 Utilities Expense 310 Insurance Expense 220 Rent Expense 9,300 Income Tax Expense 3,400 Total $ 54,130 $ 54,130 Required: Prepare an income statement for 2009. (Input all amounts as positive values. Omit the "$" sign in your response.) SKY BLUE CORPORATION Income Statement For the Year Ended December 31, 2009 Revenues: Sales revenue $ Rent revenue Total Revenues Expenses: Wages expense Rent expense Insurance expense Depreciation expense Utilities expense Income tax expense Total Expenses Net income $

The Sky Blue Corporation has the following adjusted trial balance at December 31, 2009.  

	Debit		Credit
Cash	$	1,790
Accounts Receivable		2,440
Prepaid Insurance		2,300
Notes Receivable		2,300
Equipment		13,200
Accumulated Depreciation			$	400
Accounts Payable				1,200
Accrued Liabilities Payable				3,090
Wages Payable				1,170
Income Taxes Payable				2,100
Unearned Rent Revenue				790
Contributed Capital				2,500
Retained Earnings				1,400
Dividends Declared		170
Sales Revenue				41,120
Rent Revenue				360
Wages Expense		18,300
Depreciation Expense		400
Utilities Expense		310
Insurance Expense		220
Rent Expense		9,300
Income Tax Expense		3,400
Total	$	54,130	$	54,130

Required:

Prepare an income statement for 2009. (Input all amounts as positive values. Omit the "$" sign in your response.)

SKY BLUE CORPORATION Income Statement For the Year Ended December 31, 2009
Revenues:
Sales revenue	$
Rent revenue
Total Revenues
Expenses:
Wages expense
Rent expense
Insurance expense
Depreciation expense
Utilities expense
Income tax expense
Total Expenses
Net income	$

Macro Company has the following adjusted accounts and balances at year-end (June 30, 2010):

Macro Company has the following adjusted accounts and balances at year-end (June 30, 2010):  

Accounts Payable	$	308
Accounts Receivable		579
Accrued Liabilities		157
Accumulated Depreciation		266
Administrative Expense		882
Buildings and Equipment		1,400
Cash		1,030
Contributed Capital		270
Depreciation Expense		120
Income Tax Expense		125
Income Tax Payable		34
Interest Expense		190
Interest Revenue		37
Land		170
Long-term Debt		1,400
Prepaid Expenses		43
Salaries Expense		670
Sales Revenue		3,670
Supplies		796
Rent Expense		380
Retained Earnings		120
Unearned Revenue		123

Required:

Prepare an adjusted trial balance for Macro Company at June 30, 2010. (Be sure to list the accounts in order of their liquidity. Omit the "$" sign in your response.)

 

MACRO COMPANY Adjusted Trial Balance At June 30, 2010
Account Titles	Debit	Credit
Cash	$
Accounts receivable
Supplies
Prepaid expenses
Buildings and equipment
Accumulated depreciation		$
Land
Accounts payable
Accrued liabilities
Income tax payable
Unearned revenue
Long-term debt
Contributed capital
Retained earnings
Sales revenue
Interest revenue
Administrative expense
Salaries expense
Rent expense
Depreciation expense
Interest expense
Income tax expense
Totals	$	$

Midwest Manufacturing purchased a three-year insurance policy for $34,500 on January 2, 2009. Assume the January 2, 2009, balances in T-accounts for prepaid insurance, insurance expense, cash, and retained earnings were $0, $0, $93,200, and $84,700, respectively.

Midwest Manufacturing purchased a three-year insurance policy for $34,500 on January 2, 2009. Assume the January 2, 2009, balances in T-accounts for prepaid insurance, insurance expense, cash, and retained earnings were $0, $0, $93,200, and $84,700, respectively.

Required:

(a)	Prepare journal entries, adjusting journal entries, and closing journal entries required on January 2, 2009, December 31, 2009, and December 31, 2010. (Omit the "$" sign in your response.)

	Date	General Journal	Debit	Credit
a	1/2/09	Prepaid insurance
	JE	Cash
b	12/31/09	Insurance expense
	AJE	Prepaid insurance
c	12/31/09	Retained earnings
	CJE	Insurance expense
d	12/31/10	Insurance expense
	AJE	Prepaid insurance
e	12/31/10	Retained earnings
	CJE	Insurance expense

 

(b)	Summarize the above entries in T-accounts for Prepaid insurance, Insurance expense, Cash, and Retained earnings. (Record the transactions in the given order. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

 

Prepaid Insurance

1/2/09	0
a				b
12/31/09
				d
12/31/10

 

Insurance  Expense

1/2/09	0
b				c
12/31/09
d				e
12/31/10

 

Cash

1/2/09	93,200
				a
12/31/09
12/31/10

 

Retained Earnings

			84,700	1/2/09
c
				12/31/09
e
				12/31/10

 

(c)	Given only the entries for insurance, indicate what amounts would be reported for each of these accounts on the balance sheet and income statement prepared on December 31, 2009, and December 31, 2010. (Omit the "$" sign in your response.)

	12/31/2009	12/31/2010
Balance sheet:
Assets
Cash	$	$
Prepaid insurance
Stockholders equity
Retained earnings
Income statement:
Insurance expense	$	$

The following are the independent situations. a. Hockey Helpers paid $2,400 cash on September 30, to rent an arena for the months of October and November. b. Super Stage Shows received $6,100 on September 30, for season tickets that admit patrons to a theatre event that will be held twice (on October 31 and November 30). c. Risky Ventures paid $3,900 on September 30, for insurance coverage for the months of October, November, and December. Required: Prepare journal entries to record the initial transaction on September 30 and the adjustment required on October 31. (Omit the "$" sign in your response.) Date General Journal Debit Credit a) Sept. 30 Prepaid rent Cash Oct. 31 AJE Rent expense Prepaid rent b) Sept. 30 Cash Unearned revenue Oct. 31 AJE Unearned revenue Admissions revenue c) Sept. 30 Prepaid insurance Cash Oct. 31 AJE Insurance expense Prepaid insurance

The following are the independent situations.

 

a.	Hockey Helpers paid $2,400 cash on September 30, to rent an arena for the months of October and November.
b.	Super Stage Shows received $6,100 on September 30, for season tickets that admit patrons to a theatre event that will be held twice (on October 31 and November 30).
c.	Risky Ventures paid $3,900 on September 30, for insurance coverage for the months of October, November, and December.

Required:

Prepare journal entries to record the initial transaction on September 30 and the adjustment required on October 31. (Omit the "$" sign in your response.)

 

	Date	General Journal	Debit	Credit
a)	Sept. 30	Prepaid rent
		Cash
	Oct. 31 AJE	Rent expense
		Prepaid rent
b)	Sept. 30	Cash
		Unearned revenue
	Oct. 31 AJE	Unearned revenue
		Admissions revenue
c)	Sept. 30	Prepaid insurance
		Cash
	Oct. 31 AJE	Insurance expense
		Prepaid insurance

 

Use the information for Purrfect Pets below to calculate each of the required numbers. Assume that expenses include taxes and the company has no other sources of revenue.

Use the information for Purrfect Pets below to calculate each of the required numbers. Assume that expenses include taxes and the company has no other sources of revenue.

 

December 31, 2012					December 31, 2011
Total Assets	$	257,300			Total Assets	$	201,600
Contributed Capital		96,200			Contributed Capital		64,100
Retained Earnings		55,900			Retained Earnings		44,700

 

During the period 1/1/12 to 12/31/12					During the period 1/1/11 to 12/31/11
Sales Revenue	$	185,500			Sales Revenue	$	167,400
Expenses		140,200			Expenses		119,200

 

a.	Determine the debt-to-assets ratio for the company as of December 31, 2011 and December 31, 2012. (Round your answers to 2 decimal places. Omit the "%" sign in your response.)

 

	December 31, 2011	December 31, 2012
Debt-to-assets ratio	%	%

 

b.	Determine the asset turnover ratio for the company during the year 2012. (Round your answer to 2 decimal places.)

 

Asset turnover ratio

 

c.	Determine the net income for the company for 2011 and 2012. (Omit the "$" sign in your response.)

 

	2011	2012
Net income	$	$

 

d.	Determine the net profit margin ratio for the company for 2011 and 2012. (Round your answers to 2 decimal places. Omit the "%" sign in your response.)

 

	2011	2012
Net profit margin ratio	%	%

Explanation: a.

Debt-to-assets ratio:

December 31, 2011

SE = CC + RE SE = $64,100 + $44,700 = $108,800

A = L + SE

$201,600 = L + $108,800

$201,600 – $108,800 = L

$92,800 = L

Debt-to-Assets Ratio = L ÷ A

Debt-to-Assets Ratio = $92,800 ÷ $201,600 = .4603 or 46.03%

December 31, 2012

SE = CC + RE

SE = $96,200 + $55,900 = $152,100

A = L + SE

$257,300 = L + $152,100

$257,300 – $152,100= L

$105,200 = L

Debt-to-Assets Ratio = L ÷ A

Debt-to-Assets Ratio = $105,200 ÷ $257,300 = .4089 or 40.89%

b.

Asset turnover ratio:

Average Total Assets = (Beginning Total Assets + Ending Total Assets) ÷ 2

Average Total Assets = ($201,600 + $257,300) ÷ 2 = $458,900 ÷ 2 = $229,450

Asset Turnover Ratio = 2008 Sales Revenue ÷ Average Total Assets

Asset Turnover Ratio = $185,500 ÷ $229,450 = .81.

c.

Net income for the company for 2011 and 2012:

2011

Net Income = Revenues – Expenses

Net Income = $167,400 – $119,200 = $48,200

2012

Net Income = Revenues – Expenses

Net Income = $185,500 – $140,200 = $45,300

d.

Net profit margin ratio:

2011

Net Profit Margin ratio = Net Income ÷ Sales Revenue

Net Profit Margin ratio = $48,200 ÷ $167,400 = .2879 or 28.79%

2012

Net Profit Margin ratio = Net Income ÷ Sales Revenue

Net Profit Margin ratio = $45,300 ÷ $185,500 = .2442 or 24.42%