Financial Accounting: An Integrated Statements Approach, 2nd Edition

The data necessary to adjust Gypsum Realty accounts from Alternate Problem 4-3B as of April

30, 2007, are as follows:

a. Prepaid insurance expired during April, $500.

b. Office supplies on hand at April 30, $1,750.

c. Depreciation on office equipment, $250.

d. Unearned fees earned during April, $1,000.

e. Accrued fees as of April 30, $2,800.

f. Accrued salary and commissions as of April 30, $1,500.

Instructions

1. Journalize the necessary adjusting entries for April.


2. Post the adjusting entries to T accounts. Identify each adjusting entry as “Adjusting.” For
   those accounts that were adjusted, determine an adjusted balance.


3. Prepare an adjusted trial balance as of April 30.


4. Prepare an income statement, a retained earnings statement, and a classified balance
   sheet.


5. Journalize and post the closing entries for April. Identify each entry as “Closing.” Determine
   post-closing balances.


6. Prepare a post-closing trial balance as of April 30, 2007.


7. (Appendix) Prepare a statement of cash flows for April. Note that the April 17 payment on
   account of $1,800 was for a March purchase of supplies on account.


8. (Appendix) Reconcile net income with net cash flows from operations for April.

Flamingo Company maintains and repairs warning lights, such as those found on radio towers

and lighthouses. Flamingo Company prepared the following trial balance at July 31, 2006, the

end of the current fiscal year:

202 Chapter 4 Accounting Information Systems

Alternate Problem

4-5B

Adjustments and financial

statements

Goals3, 4

2. Total debit column,
   $384,980

GENERAL LEDGER

Flamingo Company

Trial Balance

July 31, 2006

Debit Credit

Balances Balances

Cash 4,500

Accounts Receivable 13,500

Prepaid Insurance 3,000

Supplies 1,950

Land 70,000

Building 100,500

Accumulated Depreciation—Building 71,700

Equipment 71,400

Accumulated Depreciation—Equipment 60,800

Accounts Payable 4,100

Unearned Rent 1,500

Capital Stock 5,000

Retained Earnings 50,700

Dividends 4,000

Fees Revenue 181,200

Salaries and Wages Expense 73,200

Advertising Expense 15,500

Utilities Expense 8,100

Repairs Expense 6,300

Miscellaneous Expense 3,050

375,000 375,000

Alternate Problem

4-4B

Adjusting entries, financial

statements, closing entries

Goals3, 4

3. Total debit column,
   $321,850

GENERAL LEDGER