Question #1 (45 Marks)

Jacquard Industries’ adjusted trial balance for the year ending December 31, 2022 appears
below.

JACQUARD INDUSTRIES
Adjusted Trial Balance
December 31, 2022
——————————————————————————————————————————
Debit Credit
Cash ...................................................................................................... $ 3,700
Accounts receivable .............................................................................. 9,100
Prepaid rent........................................................................................... 400
Supplies ................................................................................................ 600
Equipment ............................................................................................. 34,550
Accumulated depreciation—Equipment ................................................ $ 4,600
Accounts payable .................................................................................. 3,400
Deferred revenue .................................................................................. 2,250
Interest payable .................................................................................... 435
Bank loan payable (due July 1, 2020).................................................... 21,750
Common shares..................................................................................... 10,000
Retained earnings ................................................................................. 12,500
Dividends declared ............................................................................... 1,000
Service revenue .................................................................................... 60,000
Salaries expense................................................................................... 28,850
Supplies expense .................................................................................. 16,650
Depreciation expense ........................................................................... 2,400
Rent expense ........................................................................................ 17,250
Interest expense.................................................................................... 435 _______
$114,935 $114,935

Instructions
Using the information from the adjusted trial balance, prepare the following:
(a) an statement of income; (8 Marks)
(b) a statement of changes in equity; (5 Marks)
(c) a classified statement of financial position; (20 Marks)
(d) prepare the closing journal entries (12 Marks)
Question # 2 (10 Marks)

The following selected data are taken from the financial statements of Lincoln Inc. The data are
in alphabetical order.
Accounts payable......................................................... $ 52,000
Accounts receivable..................................................... 84,500
Average assets............................................................. 520,000
Cash............................................................................. 147,200
Market price/share........................................................ 65.00
Net sales...................................................................... 590,000
Other current liabilities.................................................. 22,500
Net income................................................................... 174,000
Salaries payable........................................................... 19,600
Shareholders’ equity..................................................... 310,900
Total assets.................................................................. 500,000
Weighted average number of common shares............ 4,000

Instructions
Calculate the following ratios:
(a) Current ratio
(b) Working capital
(c) Basic earnings per share
(d) Price-earnings ratio
(e) Debt to total assets
Question # 3 (30 Marks)

Plover Corporation prepares monthly financial statements. Below are listed some selected
accounts and their balances on the September 30 trial balance before any adjustments have
been made for the month of September.

PLOVER CORPORATION
Trial Balance
September 30, 2022
——————————————————————————————————————————
Debit Credit
Cash....................................................................................................... $12,300
Supplies................................................................................................. 2,700
Prepaid insurance.................................................................................. 5,775
Equipment.............................................................................................. 16,200
Accumulated depreciation—Equipment................................................. $ 540
Accounts payable................................................................................... 1,100
Deferred revenue................................................................................... 1,200
Common shares..................................................................................... 10,000
Retained earnings.................................................................................. 18,925
Rent revenue......................................................................................... 6,360
Salaries expense................................................................................... 1,150 _______
Total....................................................................................................... $38,125 $38,125

An analysis of the account balances provided the following additional information:

1. A physical count of supplies revealed $1,200 on hand on September 30.
2. A two-year insurance policy was purchased on June 1 for $6,600.
3. The equipment was purchased on July 1st for $16,200 and has an estimated useful life of
five years.
4. Rent received in advance that remains unearned at September 30 is $500.
5. Income tax of $800 is owed.

Instructions
(a) Using the above additional information, prepare the adjusting entries that should be
made by Plover on September 30 (adjusting entries are made on a monthly basis).
(b) Prepare an adjusted trial balance at September 30.
Question # 4 (10 Marks)

Prepare adjusting entries for the following transactions. Omit explanations.

1. Depreciation on equipment is $1,850.
2. Interest incurred and owed on a loan but not paid or recorded is $680.
3. There was a beginning balance of supplies of $450 and the company purchased $760 of
office supplies during the period. At the end of the year $240 of supplies were on hand.
4. Prepaid rent had a $5,300 normal balance prior to adjustment. By year end $1,500 had
expired.
5. Accrued salaries at year end were $1,900.