Chapter 4—Completing the Accounting Cycle
MULTIPLE CHOICE
1. Under accrual-basis accounting, revenues are always recognized when
a. Earned
b. Cash is received
c. The manufacture of the product to be sold is completed
d. The selling price is firmly established
ANS: A
2. The idea that all expenses incurred in generating revenues should be recognized in the same period as
those revenues is called the
a. Time period concept
b. Realization concept
c. Matching principle
d. Revenue recognition principle
ANS: C
3. In accrual basis accounting, when are expenses usually recognized?
a. When cash is paid
b. When assets are purchased
c. When incurred
d. When assets are ordered
ANS: C
4. The matching principle requires that
a. Cash outflows be matched with cash inflows
b. Expenses incurred be matched with revenues earned
c. Assets be matched with liabilities
d. Assets be matched with equity
ANS: B
5. A twelve-month accounting period ending on December 31 is known as a
a. Calendar year
b. Reporting period
c. Fiscal year
d. All of these are correct
ANS: D
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
6. The idea that a company's life can be divided into distinct time periods so that accounting information can
be reported on a timely basis is the
a. Accrual basis accounting
b. Time period concept
c. Fiscal year concept
d. Revenue recognition concept
ANS: B
7. A system of accounting in which revenues and expenses are recorded as they are earned and incurred, is
called
a. Revenue recognition accounting
b. Accrual-basis accounting
c. Realization accounting
d. Cash-basis accounting
ANS: B
8. A system of accounting in which revenues and expenses are recorded only when cash is received or paid,
is called
a. Revenue recognition accounting
b. Accrual-basis accounting
c. Realization accounting
d. Cash-basis accounting
ANS: D
9. Under accrual-basis accounting, revenue is recognized
a. When cash is received without regard to when the services are rendered
b. When the services are rendered without regard to when cash is received
c. When cash is received before the time services are rendered
d. If cash is received after the services are rendered
ANS: B
10. Under accrual-basis accounting, expenses are recognized
a. When they are incurred, whether or not cash is paid
b. When they are incurred and paid at the same time
c. If they are paid before they are incurred
d. If they are paid after they are incurred
ANS: A
11. Which of the following is true about accrual-basis accounting?
a. Income is generally larger with accrual-basis accounting.
b. Accrual-basis accounting provides a better measure of performance.
c. Accrual-basis accounting is not required by GAAP.
d. Accrual-basis accounting and cash-basis accounting always produce the same results.
ANS: B
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
12. During 2017, Rumbo Corporation had cash and credit sales of $21,760 and $15,225, respectively. The
company also collected accounts receivable of $9,765 and incurred operating expenses of $27,700, 80
percent of which were paid during the year. In addition, Rumbo paid $4,500 for an 18-month advertising
campaign that began on September 30. Rumbo's accrual-basis net income (loss) for 2017 was
a. $9,285
b. $8,535
c. $14,075
d. $(775)
ANS: B
Net income:
$21,760 + $15,225  $27,700  $750* = $8,535
*$4,500  3/18 = $750
13. The 2017 accrual-basis statement of comprehensive income for Razorri Corporation reports services
revenue of $81,000. The related balance sheet accounts for the beginning and end of the year were
Jan. 1, 2017
Dec. 31, 2017
Unearned Services Revenue
0
$29,250
Accounts Receivable
6,750
2,250
Based on this information, the amount of cash collected during 2016 from Razorri's customers was
a. $81,000
b. $119,250
c. $114,750
d. $99,000
ANS: C
Cash collected: $81,000 + $29,250 + $6,750  $2,250 = $114,750
14. Nona Corporation, a calendar-year company, had the following transactions during 2017:
 Rented an office building to Erma Company. On September 1, Erma paid $27,000 for the
year ending August 31, 2018.
 Received notice that a $1,200 dividend would be paid on January 2, 2017, by Leslie
Corporation.
 Received a check for $13,000 from a client on December 31 for services that will be
performed during 2018.
Assuming cash-basis accounting for Nona Corporation, how much income should be reported on its 2017
statement of comprehensive income?
a. $21,000
b. $27,000
c. $40,000
d. $41,200
ANS: C
Income reported: $27,000 + $13,000 = $40,000
15. Adjusting entries are
a. Recorded on a daily basis as transactions occur
b. Not posted to the general ledger
c. Made at the end of an accounting period
d. Not required under accrual-basis accounting
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
ANS: C
16. Which of the following are usually NOT directly affected by adjusting entries?
a. Asset accounts
b. Liability accounts
c. Revenue accounts
d. Capital stock accounts
ANS: D
17. Which of the following statements about adjusting entries is NOT true?
a. They are recorded on a daily basis as transactions occur.
b. They are posted at the end of an accounting period.
c. They do not affect the cash account.
d. They are not based on transactions.
ANS: A
18. In analyzing accounts to determine which adjusting entries are necessary, accountants should determine
a. Whether the amounts recorded for all assets and liabilities are correct
b. What revenue or expense adjustment is required
c. What accounts need debits or credits
d. All of these are correct
ANS: D
19. Each adjusting entry will always affect
a. Only balance sheet accounts
b. At least one statement of comprehensive income account and one retained earnings
statement account
c. At least one balance sheet account and one statement of comprehensive income account
d. Only statement of comprehensive income accounts
ANS: C
20. Which of the following types of accounts will always be debited to adjust for an unrecorded receivable?
a. Liabilities
b. Revenues
c. Receivables
d. Expenses
ANS: C
21. Revenue items that are earned but have NOT been collected or recognized are called
a. Unearned receivables
b. Deferred revenues
c. Unrecorded receivables
d. Prepaid revenues
ANS: C
22. Which of the following will occur if an adjusting entry to record an unrecorded receivable is NOT made?
a. Both revenues and assets will be understated.
b. Both revenues and assets will be overstated.
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
c. Revenues will be understated, but assets will be overstated.
d. Assets will be understated, but revenues will be overstated.
ANS: A
23. What is the effect on account balances when an adjusting entry to record an unrecorded receivable is
made?
a. Both revenues and assets will be increased.
b. Both revenues and assets will be decreased.
c. Revenues will be increased, but assets will be decreased.
d. Assets will be increased, but revenues will be decreased.
ANS: A
24. If rent revenue of $5,000 is earned in 2017 but will NOT be received until 2017, what is the appropriate
adjusting entry at December 31, 2017?
5,000
a. Rent Receivable
Cash
b. Cash
5,000
5,000
Rent Revenue
5,000
c. Rent Revenue
5,000
d. Rent Receivable
5,000
Rent Receivable
5,000
Rent Revenue
5,000
ANS: D
25. On October 1, Doe Hunting Supplies, a calendar-year company, provided services for $100,000. The
customer signed a six-month, 10 percent note in payment. On December 31, Woods should
a. Debit Interest Receivable for $2,500
b. Debit Interest Revenue for $2,500
c. Credit Interest Revenue for $10,000
d. Debit Interest Receivable for $10,000
ANS: A
Interest Receivable: $100,000  10%  3/12 = $2,500
PTS: 1
26. On October 1, Mathis Company entered into a six-month contract with Lewis Company to provide
custodial services on a daily basis. The terms of the contract state that the cost will be $3,000 per month
and Mathis will bill Lewis at the end of every two months. If Mathis is a calendar year company, what is
the appropriate adjusting entry at December 31?
3,000
a. Cash
Services Revenue
3,000
b. Accounts Receivable
3,000
c. Services Revenue
3,000
d. Accounts Receivable
3,000
Services Revenue
3,000
Accounts Receivable
Cash
3,000
3,000
ANS: B
27. Which of the following types of accounts will always be debited to adjust for an unrecorded liability?
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
a.
b.
c.
d.
Liabilities
Revenues
Receivables
Expenses
ANS: D
28. Which of the following will occur if an adjusting entry to record an accrued but unrecorded liability is
NOT made?
a. Both expenses and liabilities will be understated.
b. Both expenses and liabilities will be overstated.
c. Expenses will be understated, but liabilities will be overstated.
d. Liabilities will be understated, but expenses will be overstated.
ANS: A
29. Unrecognized interest expense on a note is an example of a(n)
a. Unrecorded receivable
b. Unearned revenue
c. Unrecorded liability
d. Prepaid expense
ANS: C
30. An adjusting entry to record an unrecorded liability usually includes a credit to
a. A liability account
b. An asset account
c. A revenue account
d. An expense account
ANS: A
31. For which of the following types of adjusting entries is there no original entry?
a. Prepaid expenses
b. Unearned revenues
c. Unrecorded liabilities
d. None of these are correct
ANS: C
32. If on December 31, 2017, interest expense of $600 is owed on a bank note that will NOT be paid until
July 2018, what is the appropriate adjusting entry at the end of 2017?
600
a. Interest Expense
Cash
Interest
Expense
b.
Interest Payable
c. Cash
Interest Expense
d. Interest Payable
Interest Expense
600
600
600
600
600
600
600
ANS: B
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
33. Bay Graphics pays its employees each Friday for a five-day total workweek. The payroll is $9,000 per
week. If the end of the accounting period occurs on a Wednesday, what is the adjusting entry to record
wages payable?
5,400
a. Salaries Payable
Cash
5,400
b. Salary Expense
5,400
c. Salaries Payable
5,400
d. Salaries Payable
9,000
Salaries Payable
5,400
Salary Expense
5,400
Salary Expense
9,000
ANS: B
Wages payable: $9,000  3/5 = $5,400
34. Boudin Corporation, a calendar-year company, obtained a $15,000, one-year, 10 percent bank loan on
October 31 of the current year. Interest is payable at the end of the loan term. The adjusting entry needed
on December 31 is
a. A debit to Interest Expense of $1,500 and a credit to Interest Payable of $1,500
b. A debit to Interest Payable of $1,500 and a credit to Interest Expense of 1,500
c. A debit to Interest Expense of $250 and a credit to Interest Payable of $250
d. A debit to Interest Expense of $250 and a credit to Cash of $250
ANS: C
Interest payable Dec. 31: $10,000  15%  2/12 = $250
35. Bay Graphics pays its employees each Friday for a five-day total workweek. The payroll is $9,000 per
week. If the end of the accounting period occurs on a Wednesday, the adjusting entry to record wages
payable would include a
a. Debit to Salary Expense of $3,600
b. Debit to Salary Expense of $5,400
c. Credit to Cash of $5,400
d. Credit to Salaries Payable of $3,600
ANS: B
Wages payable: $9,000  3/5 = $5,400
36. Which of the following types of accounts will always be credited when a prepaid expense account is
adjusted?
a. Assets
b. Liabilities
c. Revenues
d. Expenses
37. Prepaid expense accounts are usually classified as
a. Assets
b. Liabilities
c. Expenses
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
d. Revenues
ANS: A
38. The failure to adjust a prepaid expense that has partially expired and was originally recorded by debiting a
prepaid expense for the entire amount will usually result in an
a. Understatement of assets and an understatement of expenses
b. Overstatement of assets and an overstatement of expenses
c. Understatement of assets and an overstatement of expenses
d. Overstatement of assets and an understatement of expenses
ANS: D
39. An expired asset is called a(n)
a. Revenue
b. Expense
c. Retained earning
d. Cost
ANS: B
40. An adjusting entry to record the expired portion of a prepaid expense that was originally debited to a
prepaid expense account always includes
a. A debit to an asset
b. A credit to cash
c. A debit to an expense
d. A credit to an expense
ANS: C
41. The original entry to record a prepaid expense will usually include
a. A debit to an asset account and a credit to another asset account
b. A debit to an asset account and a credit to an expense account
c. A debit to an expense account and a credit to an asset account
d. None of these are correct
ANS: A
42. On April 1, Ciaunna Company paid $48,000 for two years rent and recorded the entire amount as a debit
to Prepaid Rent. The adjusting entry on December 31 of that year would include a
a. Credit to Rent Expense of $18,000
b. Credit to Prepaid Rent of $24,000
c. Debit to Rent Expense of $24,000
d. Debit to Rent Expense of $18,000
ANS: D
Prepaid rent adjustment: $48,000  9/24 = $18,000
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
43. On June 30, 2017, Sinise Co. purchased a three-year fire insurance policy at a cost of $27,000 and debited
Prepaid Insurance for the entire amount. The policy covers the period July 1, 2017, to June 30, 2020. The
adjusting entry needed on December 31, 2017, includes a credit to
a. Insurance Expense for $9,000
b. Insurance Expense for $4,500
c. Prepaid Insurance for $4,500
d. Prepaid Insurance for $9,000
ANS: C
Prepaid insurance adjustment: $27,000  6/36 = $4,500
44. On August 1, 2017, Base Line Realty purchased a two-year insurance policy for $15,000. On that date,
the company debited Prepaid Insurance for $15,000. The adjusting entry on December 31, 2017, would
include a debit to
a. Prepaid Insurance for $2,500
b. Prepaid Insurance for $3,125
c. Insurance Expense for $3,125
d. Insurance Expense for $2,500
ANS: C
Prepaid insurance adjustment: $15,000  5/24  $3,125
45. Kim Company purchased a two-year insurance policy on October 1, 2017, for $6,000. The policy covers
its buildings for the next two years. If Kim debited Prepaid Insurance to record the purchase of the policy,
the adjusting entry on December 31, 2017 (year-end) would include a credit to
a. Insurance Expense of $750
b. Insurance Expense of $3,000
c. Prepaid Insurance of $750
d. Prepaid Insurance of $3,000
ANS: C
Prepaid insurance adjustment: $6,000  3/24 = $750
46. At the beginning of the period, Hann Corporation had $4,000 of supplies on hand. During the period, it
purchased $1,300 of supplies and debited supplies for the same amount. At the end of the period, Hann
Corporation determined that only $1,000 of supplies were still on hand. What adjusting entry should
Hann Corporation make at the end of the period?
4,300
a. Supplies
Supplies Expense
Supplies
b.
Supplies Expense
c. Supplies Expense
Supplies
d. Supplies Expense
Supplies
4,300
1,300
1,300
1,300
1,300
4,300
4,300
ANS: D
Supplies used: $4,000 + $1,300  $1,000 = $4,300
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
47. Scully Corporation purchased a three-year insurance policy on November 1 for $3,600. Assuming that
Scully Corporation recorded the original transaction by debiting Prepaid Insurance, the adjusting entry on
December 31 will include a
a. Debit to Insurance Expense for $200
b. Credit to Prepaid Insurance for $100
c. Debit to Prepaid Insurance for $100
d. Credit to Cash for $200
ANS: A
Prepaid insurance adjustment: $3,600  2/36 = $200
48. Given the following data, what is the amount in the supplies account to be shown as an asset on the
balance sheet at the end of the period?
Supplies at beginning of period
Supplies purchased during period
Supplies used during period
a.
b.
c.
d.
$500
425
375
$350
$550
$375
$425
ANS: B
Supplies balance at end of period: $500 + $425  $375 = $550
49. From the following data, determine the amount of supplies on hand at the beginning of the period.
Supplies on hand, end of period
Supplies expense for period
Supplies purchased during period
a.
b.
c.
d.
$1,025
425
800
$650
$600
$1,450
$375
ANS: A
Supplies at beginning of period: $1,025  $800 + $425 = $650
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
50. Brooklynne Company paid $25,400 in insurance premiums during 2016. Brooklynne showed $6,800 in
prepaid insurance on its December 31, 2016, balance sheet and $4,600 on December 31, 2017. The
insurance expense on the statement of comprehensive income for 2017 was
a. $18,600
b. $27,600
c. $23,200
d. $30,000
ANS: B
Insurance expense 2017: $25,400 + $6,800  $4,600 = $27,600
51. Montana Inc.'s fiscal year ended on December 31, 2017. The balance in the prepaid insurance account as
of December 31, 2017, was $34,800 (before adjustment) and consisted of the following policies:
Policy
Number
279248
694421
800616
Date of
Purchase
10/1/16
3/1/17
7/1/16
Date of
Expiration
9/30/17
2/28/19
6/30/18
Balance in
Account
$14,400
9,600
10,800
$34,800
The adjusting entry required on December 31, 2017, would be
22,000
a. Insurance Expense
Prepaid Insurance
22,000
b. Insurance Expense
20,200
c. Prepaid Insurance
17,600
d. Insurance Expense
25,600
Prepaid Insurance
20,200
Insurance Expense
17,600
Prepaid Insurance
ANS: D
Policy 279248  3 months expired last year:
Policy 694421  10 months expire this year:
Policy 800616  6 months expired last year,
12 months expire this year:
Adjusting entry:
25,600
all $14,400 expires this year
$9,600  10/24 = $4,000
$10,800  12/18 = $7,200.
$14,400 + $4,000 + $7,200 = $25,600.
52. Amounts received before they are earned are called
a. Unrecorded receivables
b. Unrecorded liabilities
c. Prepaid expenses
d. Unearned revenues
ANS: D
53. An unearned revenue account is usually considered to be a(n)
a. Liability
b. Asset
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
c. Revenue
d. Expense
ANS: A
54. If a company receives rent for January 2017 from a tenant in December 2016, that rent would be
a. A revenue in 2016
b. An asset in 2016
c. An expense in 2016
d. A liability in 2016
ANS: D
55. The failure to adjust an unearned revenue that has been partially earned and was originally recorded as a
credit to Unearned Revenue will usually result in an
a. Overstatement of revenues and an overstatement of liabilities
b. Overstatement of revenues and an understatement of liabilities
c. Understatement of revenues and an understatement of liabilities
d. Understatement of revenues and an overstatement of liabilities
ANS: D
56. An adjusting entry to record the portion of unearned revenue that was earned in the current period usually
includes a debit to
a. A liability account
b. An asset account
c. An expense account
d. A revenue account
ANS: A
57. Garcia Company has received advance payment for services yet to be performed. This prepayment is an
example of a(n)
a. Unrecorded liability
b. Unrecorded receivable
c. Prepaid expense
d. Unearned revenue
ANS: D
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
58. On June 1, 2017, Marino Corporation received $1,800 as advance payment for 12 months' advertising.
The receipt was recorded as a credit to Unearned Fees. What adjusting entry is required at December 31,
2017?
1,050
a. Unearned Fees
Advertising Revenue
b. Advertising Revenue
1,050
1,050
Unearned Fees
1,050
c. Cash
750
d. Unearned Fees
750
Advertising Revenue
750
Advertising Revenue
750
ANS: A
Unearned fees adjustment: $1,800  7/12 = $1,050
59. On December 16, 2017, Keen Company received $5,400 from Smith Company for rent on an office
building owned by Keen. The $5,400 covers the period December 16, 2017, through February 15, 2018. If
Keen Company credited Unearned Rent to record the $5,400 rent collected on December 16, the adjusting
entry needed on December 31, 2017, would include
a. A credit to Rent Revenue of $1,350
b. A credit to Unearned Rent of $1,350
c. A debit to Rent Revenue of $2,700
d. A debit to Unearned Rent Revenue of $2,700
ANS: A
Unearned rent adjustment: $5,400  15/60 = $1,350
60. On September 1, 2017, Carter's Construction Company received a $5,400 deposit towards the
construction of a new house. The house will not be finished until February 28, 2015. The deposit was
originally recorded as Unearned construction revenue. What adjusting entry is required at December 31,
2017?
1,800
a. Unearned Construction Revenue
Construction Revenue
1,800
b. Construction Revenue
3,600
c. Cash
1,800
d. Unearned Construction Revenue
3,600
Unearned Construction Revenue
3,600
Construction Revenue
Construction Revenue
1,800
3,600
ANS: D
Unearned construction revenue adjustment: $5,400  4/6 = $3,600
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
61. On December 31, the trial balance of Fife Company included the following account with a credit balance:
Unearned advertising revenue
$16,200
If it is determined that the amount of advertising revenue applicable to future periods is $10,400, the
correct adjusting entry would be:
a. Debit Unearned Advertising Revenue $10,400; credit Advertising Revenue $10,400
b. Debit Advertising Revenue $10,400; credit Unearned Advertising Revenue $10,400
c. Debit Unearned Advertising Revenue $5,800; credit Advertising Revenue $5,800
d. Debit Advertising Revenue $5,800; credit Unearned Advertising Revenue $5,800
ANS: C
Amount of advertising revenue for this period = $16,200  $10,400 = $5,800
62. From the following data, determine the amount of rent revenue earned during the period.
Unearned Rent, end of period
Unearned Rent, beginning of period
Cash received for rent during period
a.
b.
c.
d.
$20,300
15,200
40,700
$20,400
$35,600
$30,400
$55,900
ANS: B
Rent revenue earned during the period: $15,200 + $40,700  $20,300 = $35,600
63. Which of the following describes the correct order of how financial statements are prepared from the
information taken from the trial balance?
a. Compute net income, Identify all revenues and expenses, Compute the ending retained
earnings balance, Prepare a balance sheet
b. Identify all revenues and expenses, Prepare a balance sheet, Compute the ending retained
earnings balance, Compute net income
c. Compute the ending retained earnings balance, Compute net income, Prepare a balance
sheet, Identify all revenues and expenses.
d. Identify all revenues and expenses, Compute net income, Compute the ending retained
earnings balance, Prepare a balance sheet.
ANS: D
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
64. Which of the following sources provides the raw material to prepare the financial statements?
a. Statement of comprehensive income from previous year
b. Balance sheet from previous year
c. Adjusted trial balance
d. Unadjusted trial balance
ANS: C
65. The notes to the financial statements tell all of the following EXCEPT
a. Details about specific items
b. Assumptions used by the company
c. Accounting methods used by the company
d. Financial analysis
ANS: D
66. When preparing its financial statements, a company is more concerned about which of the following?
a. Assets and liabilities are not overstated
b. Assets and liabilities are not understated
c. Assets are not understated and liabilities are not overstated
d. Assets are not overstated and liabilities are not understated
ANS: C
67. Which of the following is true of a work sheet?
a. It is prepared for distribution to outsiders.
b. It facilitates the preparation of financial statements.
c. It is the next to last step in the accounting cycle.
d. It is a required step in the accounting cycle.
ANS: B
68. The purpose of financial statement analysis is to
a. Use the past performance to predict future performance.
b. Evaluate the current performance in order to identify problem areas.
c. Both use the past performance to predict future performance and evaluate the current
performance in order to identify problem areas.
d. Neither use the past performance to predict future performance nor evaluate the current
performance in order to identify problem areas.
ANS: C
69. Prior to making any adjusting entries, Terra Corporation had net income of $155,100. The following
adjusting entries were made: salaries payable, $1,574; interest earned on short-term investments but not
yet recorded or collected, $7,268; adjustment to prepaid insurance for $5,538 for an insurance policy that
expired during the period; and fees of $586 collected in advance that have now been earned. After
recording these adjustments, net income would be
a. $170,084
b. 158,008
c. 155,842
d. 155,836
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
ANS: C
Adjusted net income: $155,100  $1,574 + $7,268  $5,538 + $586 = $155,842
Exhibit 4-1
The following are a selection of account balances taken from the Adjusted Trial Balance of Cajon
Corporation for December 31, 2017:
Debit
$150
300
Cash
Store Supplies
Service Fees Revenue
Retained Earnings (1/1/17)
Accounts Payable
Dividends
Unearned Service Fees Revenue
Wage Expense
Store Supplies Expense
Credit
$600
50
70
200
180
200
50
70. Refer to Exhibit 4-1. Given the information above, Cajon Corporation had net income in 2017 of
a. $150
b. $530
c. $330
d. $350
ANS: D
Net income: $600  $200  $50 = $350
71. Refer to Exhibit 4-1. Given the information above, what is the amount of total assets on Cajon
Corporation's balance sheet in 2017?
a. $150
b. $300
c. $450
d. $650
ANS: C
Total assets: $150 + $300 = $450
72. Refer to Exhibit 4-1. Given the information above, what is the amount of total liabilities and equity on
Cajon Corporation's balance sheet in 2017?
a. $100
b. $300
c. $250
d. $450
ANS: D
Net income:
Retained earnings:
Liabilities and equity:
$600  $200  $50 = $350
$50 + $350  $200 = $200
$70 + $180 + $200 = $450
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
73. Consider the auditor’s review of a company’s adjusting entries. For which one of the following would a
concerned auditor be required to make a search of items not included in the accounting records?
a. Overstated assets
b. Overstated liabilities
c. Understated assets
d. Understated liabilities
ANS: D
74. The closing entry involving a net loss will include a
a. Credit to sales revenue
b. Debit to retained earnings
c. Credit to dividends
d. Debit to salaries expense
ANS: B
75. Nominal accounts are NOT found on which of the following financial statements?
a. Balance sheet
b. Statement of comprehensive income
c. Statement of cash flows
d. Retained earnings statement
ANS: A
76. Nominal accounts are temporary subcategories of which account?
a. Sales revenue
b. Inventory
c. Retained earnings
d. Capital stock
ANS: C
77. Which of the following accounts is NOT a real account?
a. Dividends
b. Cash
c. Accounts Payable
d. Retained Earnings
ANS: A
78. Closing entries are
a. Required to bring all real accounts to a zero balance at the end of the accounting period
b. Not required to be posted
c. Required to bring all nominal accounts to a zero balance prior to starting a new accounting
cycle
d. Generally taken from the financial statements rather than from the work sheet or the
accounts themselves
ANS: C
79. The entry to close the revenue accounts normally includes a
a. Debit to each revenue account
b. Credit to each revenue account
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
c. Debit to each expense account
d. Credit to each expense account
ANS: A
80. Which of the following is NOT a true statement?
a. Expenses are closed with a credit
b. Revenues are closed with a debit
c. Dividends are closed with a credit
d. Retained Earnings are closed with a debit
ANS: D
81. The entry to close the expense accounts normally includes a
a. Debit to each revenue account
b. Credit to each revenue account
c. Debit to each expense account
d. Credit to each expense account
ANS: D
82. The dividends account is
a. An asset
b. An expense
c. A revenue
d. None of these are correct
ANS: D
83. The dividends account is
a. Used for partnerships
b. Closed to Retained Earnings by being credited
c. A real account
d. Closed to Retained Earnings by being debited
ANS: B
84. Which of the following accounts would be closed at year-end?
a. Capital Stock
b. Prepaid Rent
c. Dividends
d. Accounts Payable
ANS: C
85. A post-closing trial balance does NOT include the
a. Real accounts
b. Balance sheet accounts
c. Permanent accounts
d. Statement of comprehensive income accounts
ANS: D
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
86. Which of the following statements is true of a post-closing trial balance?
a. Its debits must equal its credits
b. It lists all real and nominal account balances
c. It may be prepared before the closing process to provide some assurance that the previous
steps in the cycle have been performed properly
d. All of these are true
ANS: A
87. Which of the following accounts would NOT appear in the post-closing trial balance?
a. Unearned Service Fees Revenue
b. Dividends
c. Supplies
d. Salaries Payable
ANS: B
Exhibit 4-2
Short Company has the following statement of comprehensive income for 2017:
Revenues:
Services revenue
Interest revenue
Expenses:
Interest expense
Rent expense
Utilities expense
Salaries expense
Net Loss
Other comprehensive income
Comprehensive income
$630,000
21,000
$ 10,500
126,000
42,000
483,000
$651,000
661,500
$ (10,500)
0
$(10,500)
88. Refer to Exhibit 4-2. Given the information above, the entry to close revenues and expenses would
include a
a. Credit to Retained Earnings of $10,500
b. Debit to Retained Earnings of $10,500
c. Credit to Retained Earnings of $651,000
d. Credit to Retained Earnings of $651,000
ANS: B
89. Refer to Exhibit 4-2. Given the information above, the entry to close expenses would include a
a. Debit to Utilities expense of $42,000
b. Credit to Utilities expense of $42,000
c. Credit to Services revenue of $630,000
d. Debit to Salaries expense of $483,000
ANS: B
Exhibit 4-3
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
The December 31, 2017, adjusted account balances taken from the Adjusted Trial Balance of Cajon
Corporation are as follows:
Cash
Store Supplies
Service Fees Revenue
Retained Earnings
Accounts Payable
Dividends
Unearned Service Fees Revenue
Wage Expense
Store Supplies Expense
Debit
$150
300
Credit
$600
50
70
200
180
200
50
90. Refer to Exhibit 4-3. Given the information above, after all closing entries have been made, the balance in
Cajon's Retained Earnings account would be
a. $380
b. $400
c. $330
d. $200
ANS: D
Net income:
Retained earnings:
$600  $200  $50 = $350
$50 + $350  $200 = $200
91. Refer to Exhibit 4-3. Given the information above, after all closing entries have been made, the balance in
Cajon's Cash account would be
a. $250
b. $200
c. $150
d. $0
ANS: C
92. The December 31, 2017 closing entries for Smith Corp. are as follows:
Services Revenue
Interest Revenue
Wages Expense
Supplies Expense
Retained Earnings
Retained Earnings
Dividends
Debit
12,500
1,250
Credit
9,250
1,575
2,925
1,000
1,000
Smith Corp. had net income in 2017 of
a. $13,750
b. $1,925
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
c. $12,750
d. $2,925
ANS: D
93. On December 31, 2016, the balance in the Retained Earnings account is $18,500. On December 31, 2017,
the balance of Retained Earnings is $17,100. During 2017, dividends of $4,200 were declared and paid.
Based on this information, net income for 2017 is
a. $2,800
b. $7,000
c. $2,100
d. $4,200
ANS: A
Net income:
$18,500 + x  $4,200 = $17,100
x = $2,800
94. On December 31, 2016, the balance in Pacino Company's retained earnings account is $21,500. On
December 31, 2017, the balance is $22,000. During 2017, net income was $5,700. Based on this
information, dividends declared and paid for 2017 were
a. $500
b. $6,200
c. $3,500
d. $5,200
ANS: D
Dividends:
$21,500 + $5,700  x = $22,000
x = $5,200
95. Which of the following is the correct sequence of the accounting cycle
a. Record the effects of transactions, Analyze transactions, Summarize the effects of
transactions, Prepare reports
b. Analyze transactions, Record the effects of transactions, Summarize the effects of
transactions, Prepare reports
c. Summarize the effects of transactions, Prepare reports, Analyze transactions, Record the
effects of transactions
d. Analyze transactions, Prepare reports, Summarize the effects of transactions, Record the
effects of transactions
ANS: B
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
PROBLEM
1.
A list of timing concepts is provided below in the left column, with a description of the concept in the
right column. There are more descriptions provided than concepts. Match the description of the concept
to the concept.
1. ________ Cash-basis accounting.
2. ________ Accrual-basis accounting
3. ________ Matching Principle
4. ________ Accounting period concept
(a) Monthly and quarterly time periods.
(b) Companies record revenues when they receive cash and record expenses when they pay cash.
(c) Companies recognize revenue when certain criteria are satisfied and record expenses when they are
incurred regardless of whether cash is received or paid.
(d) An accounting time period that is 1 year in length.
(e) Accountants divide the economic life of a business into artificial time periods.
(f) Efforts (expenses) should be matched with accomplishments (revenues).
ANS:
1. (b) 2.(c) 3. (f) 4. (a),(d),(e)
2. In the course of your examination of the books and records of Andelin Company for the year ending
December 31, 2017, you find the following data:
Supplies expense
Salaries earned by employees
Rent paid
Salaries paid to employees
Total services revenue
Cash paid for advertising
Taxes paid
Cash collected from providing services
Cash paid on supplies purchases
Interest expense incurred
Advertising expense
Tax assessment for the year
Interest paid
Rent expense
$33,000
95,000
50,000
110,000
545,000
4,000
12,000
400,000
40,000
3,000
5,000
10,000
4,500
45,000
Compute Andelin Company's net income for 2017 using cash-basis accounting.
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
ANS:
Cash collected from providing services
Cash expenses:
Cash paid on supplies purchases
Salaries paid
Cash paid on advertising
Taxes paid
Interest paid
Rent paid
Total cash expenses
Net cash income
$400,000
$40,000
110,000
4,000
12,000
4,500
50,000
220,500
$ 179,500
3. In the course of your examination of the books and records of Andelin Company for the year ending
December 31, 2017, you find the following data:
Supplies expense
Salaries earned by employees
Rent paid
Salaries paid to employees
Total services revenue
Cash paid for advertising
Taxes paid
Cash collected from providing services
Cash paid on supplies purchases
Interest expense incurred
Advertising expense
Tax assessment for the year
Interest paid
Rent expense
$33,000
95,000
50,000
110,000
545,000
4,000
12,000
400,000
40,000
3,000
5,000
10,000
4,500
45,000
Compute Andelin Company's net income for 2017 using accrual-basis accounting.
ANS:
Total services revenue
Expenses:
Supplies expenses
Salaries expense
Advertising expense
Tax assessment
Interest expense
Rent expense
Total expenses
Net income
$545,000
$33,000
95,000
5,000
10,000
3,000
45,000
191,000
$354,000
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
4. In the course of your examination of the books and records of Griffin Company for the year ending
December 31, 2017, you find the following data:
Salaries earned by employees
Salaries paid to employees
Total services revenue
Cash collected from providing services
Utility expense incurred
Utility bills paid
Tax assessment for the year
Taxes paid
Rent expense
Rent paid
a.
b.
$ 40,000
50,000
300,000
350,000
4,500
4,200
5,000
3,500
30,000
25,000
Compute Griffin Company's net income for 2017 using cash-basis accounting.
Compute Griffin Company's net income for 2017 using accrual-basis accounting.
ANS:
a.
b.
Net Income on Cash Basis:
Cash collected from providing services
Cash expenses:
Salaries paid
Utility bills paid
Taxes paid
Rent paid
Total cash expenses
Net cash income
Net Income on Accrual Basis:
Total services revenue
Expenses:
Salaries expense
Utility expense
Tax assessment
Rent expense
Total expenses
Net income
$350,000
$50,000
4,200
3,500
25,000
82,700
$267,300
$300,000
$40,000
4,500
5,000
30,000
79,500
$220,500
5. Griesbach, Inc., prepares monthly financial statements. The September 30, 2017, trial balance reveals the
following:
Supplies on Hand
Unearned Rent Revenue
Notes Payable
Debit
$1,200
Credit
$ 1,800
45,000
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
An inventory of supplies reveals that only $675 are on hand at the end of the month. Of the unearned rent
revenue, $600 remains unearned. The note payable was taken out on September 1, 2017, for 12 months, at
10%. Lastly, the weekly payroll is $3,600. Employees are paid each Friday for a 5-day work week, and
September 30 is a Wednesday.
Assuming Griesbach, Inc. has a year end of September 30, prepare the appropriate adjusting journal
entries.
ANS:
Supplies Expense
Supplies on Hand
($1,200  $675 = $525)
Unearned Rent Revenue
Rent Revenue
($1,800  $600 = $1,200)
Interest Expense
Interest Payable
($45,000  10%  1/12 = $375)
Wages Expense
Wages Payable
($3,600  3/5 = $2,160)
525
525
1,200
1,200
375
375
2,160
2,160
6. Jennifer, the bookkeeper of Mariners Inc., thinks that the following journal entries may lead to adjusting
entries at December 31, 2017.
2017
March 1 Prepaid Insurance
Cash
February 28 Cash
Rent Revenue
2,304
2,304
18,000
18,000
June 1 Legal Service Expense
Cash
5,400
September 1 Property Tax Expense
Cash
14,400
5,400
14,400
Jennifer has gathered the following information:
a.
b.
The insurance premium is for the 12-month period ending March 1, 2018.
The rent revenue represents rent received from a tenant for the period February 28, 2017,
to August 31, 2017.
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
c.
d.
The prepaid legal services is for the services of Dewey Cheatham, attorney-at-law, for the
12-month period ending May 31, 2018.
The property tax expense is for the county's fiscal year, which ends August 31, 2018.
1.
Make any adjusting entries required at December 31, 2017. (Omit explanations.)
ANS:
1.
a.
Insurance Expense
Prepaid Insurance
($2,304  10/12 = $1,920)
1,920
1,920
b.
No adjusting entry required.
c.
Prepaid Legal Expense
Legal Service Expense
($5,400  5/12 = $2,250)
2,250
Prepaid Property Tax
Property Tax Expense
($14,400  8/12 = $9,600)
9,600
d.
2,250
9,600
7. Mycro Corporation, a computer service company, had the following transactions during 2017.
a.
b.
c.
d.
e.
1.
2.
George Hale, a salesman with Mycro, signed Datum Sales to a two-year service contract
for $48,000. The contract was signed on June 1, 2017, with Datum paying the full amount
on that date.
Mycro hired Mighty Maid Cleaning for general cleaning services. The contract was signed
on October 1 and Mycro paid for the full year ($2,400) on that date.
Fire insurance on Mycro's office building was purchased with cash on April 1. The
insurance expires March 31, 2019, and costs $4,000.
Mycro rented a floor of the office building to Gates Company for one year. Gates paid
$12,000 on August 1, the rent for 12 months.
Mycro paid Space Savers $1,800 to rent a storage facility for one year on December 1,
2017.
Journalize these transactions.
Make any adjusting entries necessary for the year ended December 31, 2017.
ANS:
1.
a.
b.
c.
Cash
Unearned Service Revenue
48,000
48,000
Prepaid Cleaning
Cash
2,400
Prepaid Insurance
Cash
4,000
2,400
4,000
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
d.
e.
2.
a.
b.
c.
d.
e.
Cash
Unearned Rent Revenue
Prepaid Rent
Cash
Unearned Service Revenue
Service Revenue
($48,000  7 / 24 = $14,000)
Cleaning Expense
Prepaid Cleaning
($2,400  3 / 12 = $600)
12,000
12,000
1,800
1,800
14,000
14,000
600
600
Insurance Expense
Prepaid Insurance
($4,000  9 / 24 = $1,500).
1,500
Unearned Rent Revenue
Rent Revenue
($12,000  5 / 12 = $5,000)
5,000
Rent Expense
Prepaid Rent
($1,800  1 / 12 = $150)
1,500
5,000
150
150
8. Mancheski and Sons Inc. reported net income of $45,600 in 2017. Carl, the company bookkeeper,
neglected to make the necessary adjusting entries. The necessary adjustments are given below:
a.
b.
c.
d.
1.
2.
Supplies at the beginning of the year were $4,000. Supply purchases during the year
totaled $2,500 and Supplies was debited for this amount. Ending inventory was $1,000.
Insurance purchased during the year was $3,500, of which $1,000 remained unexpired at
year end. Prepaid Insurance was debited to record the purchase of this policy.
Rent revenue collected for the year was $15,000. Only $5,000 of this was earned in 2017.
The company credited Unearned Rent to record the $15,000 rent collection.
The company rents storage space from a local firm. Mancheski paid the rent for September
1, 2017, to August 31, 2018, a total of $1,500, in advance on September 1. This was
recorded as a prepaid expense.
Prepare the necessary adjusting entries for December 31, 2017.
Determine Mancheski's corrected net income for 2017.
ANS:
1.
a.
b.
c.
Supplies Expense
Supplies
($4,000 + $2,500  $1,000)
5,500
Insurance Expense
Prepaid Insurance
($3,500  $1,000)
2,500
Unearned Rent Revenue
5,000
5,500
2,500
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
Rent Revenue
d.
2.
Rent Expense
Prepaid Rent
($1,500  4 / 12 = $500)
5,000
500
500
Original net income
$45,600
Adjustments:
Supplies expense
Insurance expense
Rent revenue
Rent expense
Corrected net income
(5,500)
(2,500)
5,000
(500)
$42,100
9. AQUA Company Ltd. accumulates the following adjustment data at December 31.
1. Services provided but not recorded total €1,420.
2. Supplies of €300 have been used.
3. Utility expenses of €225 are unpaid.
4. Unearned service revenue of €260 is recognized for services performed.
5. Salaries of €800 are unpaid.
6. Prepaid insurance totaling €380 has expired.
For each of the above items indicate the following.
1. The type of adjustment (prepaid expense, unearned revenue, accrued revenue, or accrued expense).
2. The status of accounts before adjustment (overstatement or understatement).
ANS:
Item
(a) Type of Adjustment
(b) Accounts before Adjustment
1.
Accrued Revenues
Assets Understated
Revenues Understated
2.
Prepaid Expenses
Assets Overstated
Expenses Understated
3.
Accrued Expenses
Expenses Understated
Liabilities Understated
4.
Unearned Revenues
Liabilities Overstated
Revenues Understated
5.
Accrued Expenses
Expenses Understated
Liabilities Understated
6.
Prepaid Expenses
Assets Overstated
Expenses Understated
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
10.
For each type of adjustment listed, indicate whether it is an unrecorded receivable, an unrecorded
liability, an unearned revenue, or a prepaid expense at December 31, 2017.
1. Property taxes that are for the year 2017, but are not to be paid until 2018.
2. Rent revenue earned during 2017, but not collected until 2018.
3. Salaries earned by employees in December 2017, but not to be paid until January 5, 2018.
4. A payment received from a customer in December 2017 for services that will not be performed
until February 2018.
5. An insurance premium paid on December 29, 2017, for the period January 1, 2018, to December
31, 2018.
6. Gasoline charged on a credit card during December 2017. The bill will not be received until
January 15, 2018.
7. Interest on a certificate of deposit held during 2017. The interest will not be received until January
7, 2018.
8. A deposit received on December 15, 2017, for rental of storage space. The rental period is from January 1, 2018, to December 31, 2018.
ANS:
1.
3.
5.
7.
Unrecorded liability
Unrecorded liability
Prepaid expense
Unrecorded receivable
2.
4.
6.
8.
Unrecorded receivable
Unearned revenue
Unrecorded liability
Unearned revenue
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
11. An analysis of cash records and account balances of Apartment Renters, Inc., for 2017 is as follows:
Wages Payable
Unearned Rent
Prepaid Insurance
Paid for wages
Received for rent
Paid for insurance
Account Balances
Jan. 1, 2017
$2,600
4,500
100
Account Balances
Dec. 31, 2017
$3,000
5,000
120
Cash Received or Paid
in 2017
$29,600
12,000
720
Required:
Determine the amounts that should be included on the 2017 statement of comprehensive income for
(1) salaries expense, (2) rent revenue, and (3) insurance expense.
ANS:
1.
Salaries expense:
Cash paid for 2017 salaries ...................................................................................
Plus: Net increase in salaries payable ($18,400 – $15,600) ..................................
Total 2017 salaries expense ............................................................................
12.
$134,000
2,800
$136,800
2.
Rent revenue:
Cash received for 2017 rent ..................................................................................
$48,500
Less:
Net
increase
in
unearned
rent
($14,100
–
$10,350) .......................................................................................................................
(3,75
0)
Total 2017 rent revenue ..................................................................................
$44,750
3.
Insurance expense:
Cash paid for 2017 insurance ................................................................................
Plus: Net decrease in prepaid insurance ($3,300 – $2,000) ..................................
Total 2017 insurance expense .........................................................................
$13,800
1,300
$15,100
For each type of adjustment listed, indicate whether it is an unrecorded receivable, an unrecorded
liability, an unearned revenue, or a prepaid expense at December 31, 2017.
1. Property taxes that are for the year 2017, but are not to be paid until 2018.
2. Rent revenue earned during 2017, but not collected until 2018.
3. Salaries earned by employees in December 2017, but not to be paid until January 5, 2018.
4. A payment received from a customer in December 2017 for services that will not be performed
until February 2018.
5. An insurance premium paid on December 29, 2017, for the period January 1, 2018, to December
31, 2018.
6. Gasoline charged on a credit card during December 2017. The bill will not be received until January 15, 2018.
7. Interest on a certificate of deposit held during 2017. The interest will not be received until January 7, 2018.
8. A deposit received on December 15, 2017, for rental of storage space. The rental period is from
January 1, 2018, to December 31, 2018.
ANS:
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
1.
2.
3.
4.
5.
6.
7.
8.
Unrecorded liability
Unrecorded receivable
Unrecorded liability
Unearned revenue
Prepaid expense
Unrecorded liability
Unrecorded receivable
Unearned revenue
13. Pearl Associates is a professional corporation providing management consulting services. The company initially debits assets in recording prepaid expenses and credits liabilities in recording unearned
revenues. Give the entry that Pearl would use to record each of the following transactions on the date it
occurred. Prepare the adjusting entries needed on December 31, 2017.
1. On July 1, 2017, the company paid a three-year premium of $5,400 on an insurance policy that is
effective July 1, 2017, and expires June 30, 2020.
2. On February 1, 2017, Pearl paid its property taxes for the year February 1, 2017, to January 31,
2018. The tax bill was $2,400.
3.
On May 1, 2017, the company paid $360 for a three-year subscription to an advertising journal.
The subscription starts May 1, 2017, and expires April 30, 2020.
4. Pearl received $3,600 on September 15, 2017, in return for which the company agreed to provide
consulting services for 18 months beginning immediately.
5. Pearl rented part of its office space to Davis Realty. Davis paid $900 on November 1, 2017, for
the next six months’ rent.
6. Pearl loaned $80,000 to a client. On November 1, the client paid $14,400, which represents two
years’ interest in advance (November 1, 2017, through October 31, 2019).
ANS:
1.
Original entry
Prepaid Insurance ....................................................................................
Cash ..................................................................................................
Adjusting entry
Insurance Expense...................................................................................
Prepaid Insurance..............................................................................
($5,400/3 years = $1,800 per year; $1,800 year 
1/2 year = $900)
2.
Original entry
Prepaid Property Taxes ...........................................................................
Cash ..................................................................................................
Adjusting entry
Property Tax Expense .............................................................................
Prepaid Property Taxes ..................................................................................
($2,400/12 months = $200 per month; $200  11
months = $2,200)
3.
Original entry
Prepaid Subscriptions ..............................................................................
5,400
5,400
900
900
2,400
2,400
2,200
2,200
360
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
Cash ..................................................................................................
Adjusting entry
Subscription Expense ..............................................................................
Prepaid Subscriptions .......................................................................
($360/36 months = $10 per month; $10  8 months
= $80)
4.
Original entry
Cash.........................................................................................................
Unearned Consulting Fees Revenue .................................................
Adjusting entry
Unearned Consulting Fees Revenue .......................................................
Consulting Fees Revenue .................................................................
($3,600/18 months = $200 per month; $200 per
month  3 1/2 months = $700)
5.
Original entry
Cash.........................................................................................................
Unearned Rent Revenue ...................................................................
Adjusting entry
Unearned Rent Revenue..........................................................................
Rent Revenue ....................................................................................
($900/6 months = $150 per month; $150  2
months = $300)
6.
Original entry
Cash.........................................................................................................
Unearned Interest Revenue ...............................................................
Adjusting entry
Unearned Interest Revenue .....................................................................
Interest Revenue ...............................................................................
($14,400/24 months = $600 per month; $600 
2 months = $1,200)
360
80
80
3,600
3,600
700
700
900
900
300
300
14,400
14,400
1,200
1,200
14. Consider the following information related to Palm Consulting:
1. On October 1, 2017, Palm Consulting entered into an agreement to provide consulting services
for six months to Soel Company. Soelagreed to pay Pendleton $1,125 for each month of service.
Payment will be made at the end of the contract (March 31, 2018).
2. On April 30, Palm borrowed $60,000 from a local bank at 12%. The loan is to be repaid, with interest, after one year. As of December 31, no interest expense had been recognized.
3. On February 25, Palm paid $54,000 for 12 months of rent beginning on March 1. On February
25, Pendleton made a journal entry debiting Prepaid Rent Expense.
4. At the beginning of 2017, Pendleton had $1,238 in supplies on hand. During 2017, Pendleton
purchased $10,935 in supplies. On December 31, 2017, Palm had $1,553 in supplies on hand.
For each item listed, prepare the necessary adjusting entries to be made on December 31, 2017.
ANS:
1.
Accounts Receivable .....................................................................................
Consulting Revenue ................................................................................
3,375
3,375
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
To record three months of consulting revenue earned,
but not yet received. ($1,125 per month  3 months = $3,375)
2.
3.
4.
Interest Expense .............................................................................................
Interest Payable .......................................................................................
To record eight months interest expense to be paid
next year. ($60,000  0.12  8/12 = $4,800)
4,800
Rent Expense .................................................................................................
Prepaid Rent Expense .............................................................................
To record 10 months of rent expense.
($54,000  10/12 = $45,000)
45,000
Supplies Expense ...........................................................................................
Supplies on Hand ....................................................................................
Beginning supplies on hand ($1,238) + Supplies purchased
($10,935) – Ending supplies on hand ($1,553) = Supplies
used during the year ($10,620).
7,080
4,800
45,000
7,080
15. Lincoln Company's adjusted trial balance as of August 31, 2017, is shown below:
Lincoln Company
Adjusted Trial Balance
August 31, 2017
Cash
Accounts Receivable
Supplies
Prepaid Rent
Land
Accounts Payable
Capital Stock (10,000 shares outstanding as of 8/31/17)
Retained Earnings (9/1/16)
Dividends
Services Revenue
Advertising Expense
Salaries Expense
Debits
$30,500
7,400
800
3,500
21,200
Credits
$15,300
45,400
900
800
21,200
1,800
15,000
$81,900
______
$81,900
Prepare a balance sheet for the year ended August 31, 2017.
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
ANS:
Lincoln Company
Balance Sheet
August 31, 2017
Assets
Current assets:
Cash
Accounts receivable
Supplies
Prepaid Rent
Total current assets
Property, plant and equipment:
Land
Total property, plant and equipment
Total assets
$ 30,500
7,400
800
3,500
$42,200
21,200
$21,200
$63,400
Liabilities and Equity
Current liabilities:
Accounts payable
Total current liabilities
Equity:
Capital stock
Retained earnings
Total equity
Total liabilities and equity
* Retained earnings balances:
Beginning retained earnings
Add: net income ($21,200  $1,800  $15,000)
Deduct: dividends
Ending retained earnings
$15,300
$15,300
$45,400
2,700*
$48,100
$63,400
$
(900)
4,400
$ 3,500
800
$ 2,700
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
16. Palmer Pen Co. has the following adjusted trial balance:
Palmer Pen Co.
Adjusted Trial Balance
December 31, 2017
Cash
Accounts Receivable
Supplies
Buildings
Machinery and Equipment
Land
Accounts Payable
Notes Payable
Capital Stock (100,000 shares outstanding as of 12/31/17)
Retained Earnings (1/1/17)
Services Revenue
Salaries Expense
Insurance Expense
Dividends
Utilities Expense
Income Tax Expense
Debit
$ 50,000
40,500
4,000
174,580
30,000
20,000
Credit
$ 37,400
49,180
150,000
76,000
189,850
125,000
6,000
20,000
12,000
20,350
$502,430
_______
$502,430
Prepare a statement of comprehensive income and a balance sheet in good form for Palmer Pen Co.
(Assume that other comprehensive income is $0)
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
ANS:
Palmer Pen Co.
Statement of Comprehensive Income
For the Year Ended December 31, 2017
Services revenue
Less expenses:
Salaries expense
Utilities expense
Insurance expense
$189,850
$125,000
12,000
6,000
Income before income tax
Income tax expense
Net income
Other comprehensive income
Comprehensive income
143,000
$ 46,850
20,350
$ 26,500
0
$ 26,500
Earnings per share ($26,500 / 100,000)
$0.265
Palmer Pen Co.
Balance Sheet
December 31, 2017
Assets
Current assets:
Cash
Accounts receivable
Supplies
Total current assets
Property, plant and equipment:
Buildings
Machinery and equipment
Land
Total property, plant and equipment
Total assets
Liabilities and Equity
Current liabilities:
Accounts payable
Notes payable
Total current liabilities
Equity:
Capital stock
Retained earnings
Total equity
Total liabilities and equity
$50,000
40,500
4,000
$94,500
$174,580
30,000
20,000
$224,580
$319,080
$ 37,400
49,180
$ 86,580
$150,000
82,500*
$232,500
$319,080
\
* Retained earnings balances:
Beginning retained earnings
Add: net income
Deduct: dividends
Ending retained earnings
$ 76,000
26,500
$102,500
20,000
$ 82,500
17. Roosevelt Company's adjusted trial balance as of August 31, 2017, is shown below:
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
Roosevelt Company
Adjusted Trial Balance
August 31, 2017
Cash
Accounts Receivable
Supplies
Prepaid Rent
Land
Accounts Payable
Capital Stock (10,000 shares outstanding as of 8/31/17)
Retained Earnings (9/1/16)
Dividends
Services Revenue
Advertising Expense
Salaries Expense
Debits
$ 61,000
14,800
1,600
7,000
42,400
Credits
$30,600
90,800
1,800
1,600
42,400
3,600
30,000
$163,800
_______
$163,800
Prepare the statement of comprehensive income and a statement of retained earnings for the year
ended August 31, 2017. (Assume that other comprehensive income is $0)
ANS:
Roosevelt Company
Statement of Comprehensive Income
For the Year Ended August 31, 2017
Services revenue
Less expenses:
Advertising expense
Salaries expense
Net income
Other comprehensive income
Comprehensive income
$ 42,400
$3,600
30,000
Earnings per share ($8,800 / 10,000)
33,600
$ 8,800
0
$ 8,800
$0.88
Roosevelt Company
Statement of Retained Earnings
For the Year Ended August 31, 2017
Beginning retained earnings
Add: Net Income
Less: Dividends
Ending retained earnings
$(1,800)
8,800
1,600
$ 5,400
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
18. The trial balances after adjustment for Amis Company at the end of its fiscal year are presented below.
AMIS COMPANY
Adjusted Trial Balance
December31, 2017
Cash
Accounts Receivable
Supplies
Prepaid Insurance
Equipment
Accumulated Depreciation—
Equipment
Accounts Payable
Salaries and Wages Payable
Unearned Rent Revenue
Capital Stock
Retained Earnings
Service Revenue
Rent Revenue
Salaries and Wages Expense
Supplies Expense
Rent Expense
Insurance Expense
Depreciation Expense
Dr.
$10,400
10,000
700
2,500
14,000
Cr.
$4,900
5,800
1,100
800
12,000
3,600
35,200
11,700
18,100
1,600
15,000
1,500
1,300
$75,100
$75,100
Prepare the statement of comprehensive income and the statement of retained earnings for the year
2017 and the balance sheet as of December 31, 2017.
ANS:
AMIS COMPANY
Statement of Comprehensive Income
For the Year Ended June 30, 2017
Revenues
Service revenue ..............................................................................................
Rent revenue ..................................................................................................
Total revenues .........................................................................................
Expenses
Salaries and wages expense ...........................................................................
Rent expense ..................................................................................................
Supplies expense ............................................................................................
Insurance expense ..........................................................................................
Depreciation expense .....................................................................................
Total expenses .........................................................................................
Net income
....................................................................................................
$35,200
11,700
46,900
$18,100
15,000
1,600
1,500
1,300
37,500
$ 9,400
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
AMIS COMPANY
Statement of Retained Earnings
For the Year Ended June 30, 2017
Retained earnings, July 1, 2015 ...............................................................................
Add:
Net income.................................................................................................
Retained earnings, June 30, 2017 ............................................................................
$ 3,600
9,400
$13,000
AMISCOMPANY
Balance Sheet
June 30, 2017
Assets
Current assets:
Cash
..................................................................................................
Accounts receivable .......................................................................................
Supplies ....................................................................................................
Prepaid insurance ...........................................................................................
Long-term assets:
Equipment ....................................................................................................
Less: Accum. depreciation—equipment .....................................................
Total assets
....................................................................................................
$ 10,400
10,000
700
2,500
$14,000
(4,900)
$32,700
Equity and Liabilities
Current liabilities:
Unearned rent revenues ................................................................................. $
Salaries and wages payable............................................................................
Accounts payable ...........................................................................................
Total Liabilities ..............................................................................................
Equity
Capital stock ..................................................................................................
Retained earnings...........................................................................................
Total Equity ...................................................................................................
Total equity and liabilities
9,100
800
1,100
5,800
$ 7,700
$12,000
13,000
25,000
$32,700
19. Revenue and expense accounts of Reschke Training Services for November 30, 2017, are given as
follows. Prepare a compound journal entry that will close the revenue and expense accounts to the
retained earnings account.
Debits
Services Revenue
Salaries Expense
Interest Expense
Rent Expense
Insurance Expense
Property Tax Expense
Supplies Expense
Advertising Expense
Credits
$182,500
$42,000
2,500
12,600
2,800
900
1,600
13,000
ANS:
Services Revenue .......................................................................................
372,000
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
Salaries Expense ...............................................................................
Interest Expense ................................................................................
Rent Expense ....................................................................................
Insurance Expense ............................................................................
Property Tax Expense .......................................................................
Supplies Expense ..............................................................................
Advertising Expense .........................................................................
Retained Earnings .............................................................................
42,000
2,500
12,600
2,800
900
1,600
13,000
107,100
20. Lincoln Company's trial balance as of August 31, 2017, is shown below:
Lincoln Company
Trial Balance
August 31, 2017
Cash
Accounts Receivable
Supplies
Prepaid Rent
Land
Accounts Payable
Capital Stock
Retained Earnings
Dividends
Services Revenue
Advertising Expense
Salaries Expense
Debits
$30,500
7,400
800
3,500
21,200
Credits
$15,300
45,400
900
800
21,200
1,800
15,000
$81,900
______
$81,900
Prepare the closing entries for the year ended August 31, 2017.
ANS:
Closing entries:
Services Revenue
Retained Earnings
Advertising Expense
Salaries Expense
Retained Earnings
Dividends
21,200
4,400
1,800
15,000
800
800
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
21. Lincoln Company's trial balance as of August 31, 2017, is shown below:
Lincoln Company
Trial Balance
August 31, 2017
Debits
$30,500
7,400
800
3,500
21,200
Cash
Accounts Receivable
Supplies
Prepaid Rent
Land
Accounts Payable
Capital Stock
Retained Earnings
Dividends
Sales Revenue
Advertising Expense
Salaries Expense
Credits
$15,300
45,400
900
800
21,200
1,800
15,000
$81,900
______
$81,900
Prepare the post-closing trial balance for the year ended August 31, 2017.
ANS:
Lincoln Company
Post-Closing Trial Balance
August 31, 2017
Debit
$30,500
7,400
800
3,500
21,200
Cash
Accounts Receivable
Supplies
Prepaid Rent
Land
Accounts Payable
Capital Stock
Retained Earnings
* Net Income:
Retained Earnings:
______
$63,400
Credit
$15,300
45,400
2,700*
$63,400
$21,200  1,800  15,000 = $4,400
$(900) + 4,400  800 = $2,700
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
22. Palmer Pen Co. has the following adjusted trial balance:
Palmer Pen Co.
Adjusted Trial Balance
December 31, 2017
Cash
Accounts Receivable
Supplies
Buildings
Machinery and Equipment
Land
Accounts Payable
Notes Payable
Capital Stock
Retained Earnings
Services Revenue
Salaries Expense
Insurance Expense
Dividends
Utilities Expense
Income Tax Expense
a.
b.
Debit
$ 50,000
40,500
4,000
174,580
30,000
20,000
Credit
$ 37,400
49,180
150,000
76,000
189,850
125,000
6,000
20,000
12,000
20,350
$502,430
_______
$502,430
Prepare the necessary closing entries.
Prepare the post-closing trial balance.
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
ANS:
a.
Closing entries:
Services Revenue
Retained Earnings
Salaries Expense
Utilities Expense
Insurance Expense
Income Tax Expense
189,850
26,500
125,000
12,000
6,000
20,350
Retained Earnings
Dividends
b.
20,000
20,000
Palmer Pen Co.
Post-Closing Trial Balance
December 31, 2017
Cash
Accounts Receivable
Supplies
Buildings
Machinery and Equipment
Land
Accounts Payable
Notes Payable
Capital Stock
Retained Earnings
Debit
$ 50,000
40,500
4,000
174,580
30,000
20,000
_______
$319,080
Credit
$ 37,400
49,180
150,000
82,500
$319,080
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
23. Davis Company had the following adjusted trial balance.
DAVIS COMPANY
Adjusted Trial Balance
For the Month Ended June 30, 2017
Adjusted Trial Balance
Account Titles
Debit
Credit
Cash
$ 3,712
Accounts Receivable
2,904
Supplies
480
Accounts Payable
$ 1,056
Unearned Service Revenue
160
Capital Stock
3,000
Retained Earnings
1,360
Dividends
300
Service Revenue
4,300
Salaries and Wages Expense
1,344
Miscellaneous Expense
180
Supplies Expense
1,200
Salaries and Wages Payable
244
$10,120
$10,120
1. Prepare closing entries at June 30, 2017.
2. Prepare a post-closing trial balance.
ANS:
(a)
Service Revenue ....................................................................................... 4,300
Retained Earnings .............................................................................
4,300
Retained Earnings ..................................................................................... 2,724
Salaries and Wages Expense .............................................................
Miscellaneous Expense .....................................................................
Supplies Expense ..............................................................................
1,344
180
1,200
Retained Earnings ....................................................................................... 300
Dividends ..........................................................................................
300
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
(b)
DAVIS COMPANY
Post-Closing Trial Balance
For the Month Ended June 30, 2017
Account Titles
Debit
Cash ...........................................................................................................
Accounts Receivable .................................................................................
Supplies .....................................................................................................
Accounts Payable ......................................................................................
Salaries and Wages Payable ......................................................................
Unearned Service Revenue ........................................................................
Capital Stock..............................................................................................
Retained Earnings ......................................................................................
Credit
$3,712
2,904
480
$7,096
$1,056
244
160
3,000
2,636
$7,096
24. For each account listed below, check whether it appears on the statement of comprehensive income or
the balance sheet and whether it would normally have a debit or a credit balance. (Note: This covers
the entire accounting cycle.) The first line has been completed as an example.
Account
Notes Payable
Prepaid Insurance
Cash
Land
Interest Revenue
Accounts Receivable
Wages Payable
Income Tax Expense
Notes Receivable
Common Stock
Service Revenue
Supplies
Supplies Expense
Rent Revenue
Furniture
Short-Term Investments
Unearned Rent
Plant and Equipment
Retained Earnings
Accounts Payable
Long-Term Debt
Miscellaneous Expense
Balance
Sheet
X
Statement
of
Comprehensive
Income
Debit
Credit
X
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
ANS:
Account
Notes Payable
Prepaid Insurance
Cash
Land
Interest Revenue
Accounts Receivable
Wages Payable
Income Tax Expense
Notes Receivable
Common Stock
Service Revenue
Supplies
Supplies Expense
Rent Revenue
Furniture
Short-Term Investments
Unearned Rent
Plant and Equipment
Retained Earnings
Accounts Payable
Long-Term Debt
Miscellaneous Expense
Balance
Sheet
Statement
of
Comprehensive
Income
X
X
X
X
Debit
Credit
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
25. For each account listed below, mark the column that BEST describes the correct classification of the
account and mark the column for the financial statement on which the account would appear. Assume
that all accounts have normal balances. (NOTE: This problem covers the entire accounting cycle.) The
first line has been completed as an example.
Account
Notes Payable
Prepaid Insurance
Cash
Land
Interest Revenue
Accounts Receivable
Wages Payable
Income Tax Expense
Notes Receivable
Common Stock
Service Revenue
Supplies
Supplies Expense
Rent Revenue
Furniture
Short-Term Investment
Unearned Rent
Plant and Equipment
Retained Earnings
Accounts Payable
Long-Term Debt
Miscellaneous Expense
Asset
Liability
X
Equity
Expense
Revenue
Balance
Sheet
Statement
of
Comprehensive
Income
X
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
ANS:
Account
Notes Payable
Prepaid Insurance
Cash
Land
Interest Revenue
Accounts Receivable
Wages Payable
Income Tax Expense
Notes Receivable
Common Stock
Service Revenue
Supplies
Supplies Expense
Rent Revenue
Furniture
Short-Term Investment
Unearned Rent
Plant and Equipment
Retained Earnings
Accounts Payable
Long-Term Debt
Miscellaneous Expense
Asset
Liability
Equity
Expense
Revenue
X
Balance
Sheet
Statement
of
Comprehensive
Income
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
© 2018 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.