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AC 310 Lab Problems - 9.7.2021

1. The document provides sample accounting problems and questions related to closing entries, interest calculations, T-accounts, prepaid expenses, the accounting equation, normal balances, and preparing an income statement. 2. Problem 1 asks the learner to calculate ending retained earnings after closing entries using provided account balances. 3. Problem 7 asks the learner to review and correct a multi-step income statement that was improperly prepared by an accountant.

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Abdullah alhamaad
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113 views2 pages

AC 310 Lab Problems - 9.7.2021

1. The document provides sample accounting problems and questions related to closing entries, interest calculations, T-accounts, prepaid expenses, the accounting equation, normal balances, and preparing an income statement. 2. Problem 1 asks the learner to calculate ending retained earnings after closing entries using provided account balances. 3. Problem 7 asks the learner to review and correct a multi-step income statement that was improperly prepared by an accountant.

Uploaded by

Abdullah alhamaad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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AC 310 Lab Problems

Lab Meeting 9.7.2021


1. Prior to closing, Datema Company's accounting records showed the following balances:

Retained earnings $ 20,000  


Service revenue   50,000  
Interest revenue   2,000  
Depreciation expense   15,000  
Operating expense   4,000  
Interest expense   900  
Dividends   5,000  

What is the ending balance in Retained Earnings after closing entries are made?
2. Jared, Inc. borrows $100,000 at a 12% interest rate on June 30, 2019. The loan is due in 3
years. Interest is due annually in June 30.
a. Prepare the journal entry to record interest through December 31, 2019.

b. Prepare the journal entry to record the payment of interest on June 30, 2020.

3. During 2018, Tyler Corporation reported supplies expense of $100,000. The supplies
account decreased by $25,000 from the beginning of the year to the end of the year. What
were the cost of supplies purchased during the year? (use T-accounts to solve)

4. On December 31, 2018, Hayden Incorporated had a balance in its Prepaid Rent account
of $50,000 (a $15,000 increase from the January 1, 2018 balance). During the year,
Hayden Incorporated paid $120,000 for rent. Each time a rent payment was made, the
accountant debited Prepaid Rent. What amount of rent expense will show on the income
statement for 2018? (use T-accounts to solve)

5. When a company has incurred an expense but not paid for it yet, how is the accounting
equation impacted? Why is it important to record expenses even if they have not been
paid?

6. What is a normal balance for the following accounts and give examples of each type:

a. Assets
i. Contra Assets
b. Liabilities
c. Shareholders’ Equity
i. Contra Equity
d. Revenues
e. Expenses
f. Dividends
AC 310 Lab Problems
Lab Meeting 9.7.2021
7. The following income statement for Axel Corporation was prepared by the accountant.
You have been asked to review it and prepare a corrected multi-step income statement.
Axel Corporation
Income Statement
For the Year Ended December 31, 2021
Revenues and Gains
Sales Revenue $592,000
Interest Revenue 32,000
Gain on Sale of Investments 86,000
Total Revenues and Gains 710,000

Expenses and Losses


Cost of Goods Sold $325,000
Selling Expenses 67,000
Administrative Expenses 87,000
Interest Expense 16,000
Restructuring Costs 55,000
Income Tax Expense 40,000
Total Expenses and Losses 590,000

Net Income 120,000

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