Sovi.AI - AI Math Tutor

Scan to solve math questions
ENFRDEESJAZH-CNZH-TW

QUESTION IMAGE

part three—analyzing adjustments and extending account balances on a wo…

Question

part three—analyzing adjustments and extending
account balances on a work sheet
directions: for each account listed below, determine in which work sheet column(s)
an amount typically will be written. place a check mark in the proper answers
column to show your answer.
\t\t\tadjustments\tincome
statement\tbalance
sheet
\t\tdebit\tcredit\tdebit\tcredit\tdebit\tcredit
\t\t(pp. 164–166)\t(p. 170)\t(p. 169)

  1. cash\t__\t\t\t\t\t__
  2. petty cash\t__\t\t\t\t\t__
  3. accounts receivable—corner

bakery\t__\t\t\t\t\t__

  1. supplies\t__\t\t\t\t\t__
  2. prepaid insurance\t__\t\t\t\t\t__
  3. accounts payable—suburban

office supplies\t__\t\t\t\t\t__

  1. k. strand, capital\t__\t\t\t\t\t__
  2. k. strand, drawing\t__\t\t\t\t\t__
  3. income summary\t__\t\t\t\t\t__
  4. sales\t__\t\t\t\t\t__
  5. advertising expense\t__\t\t\t\t\t__
  6. cash short and over (debit balance)\t__\t\t\t\t\t__
  7. insurance expense\t__\t\t\t\t\t__
  8. miscellaneous expense\t__\t\t\t\t\t__
  9. rent expense\t__\t\t\t\t\t__
  10. supplies expense\t__\t\t\t\t\t__
  11. utilities expense\t__\t\t\t\t\t__

Explanation:

Brief Explanations

To solve this, we analyze each account's nature (asset, liability, equity, revenue, expense) and where its amount is extended:

1. Cash
  • Type: Asset (permanent account).
  • Adjustments: No typical adjustment (unless specific, but generally, adjustments for cash are rare; assume no check here).
  • Income Statement: No (income statement is for revenue/expense).
  • Balance Sheet: Debit (assets have debit balances).
  • So: Balance Sheet Debit.
2. Petty Cash
  • Type: Asset (permanent account).
  • Adjustments: Rare (unless replenished, but worksheet adjustments for petty cash are unusual; assume no check).
  • Income Statement: No.
  • Balance Sheet: Debit.
  • So: Balance Sheet Debit.
3. Accounts Receivable—Corner Bakery
  • Type: Asset (permanent account).
  • Adjustments: May have adjustments (e.g., bad debts), but if no adjustment, or if extending, it’s a balance sheet account.
  • Income Statement: No.
  • Balance Sheet: Debit.
  • So: Balance Sheet Debit.
4. Supplies
  • Type: Asset (prepaid expense, permanent).
  • Adjustments: May have a credit adjustment (supplies used: Supplies Credit, Supplies Expense Debit).
  • Income Statement: No (unless expense, but Supplies is asset).
  • Balance Sheet: Debit (before adjustment) or adjusted debit. If adjusting, Adjustments Credit (for used supplies), but extending: Balance Sheet Debit (adjusted).
  • So: Adjustments Credit (if adjusting for use), Balance Sheet Debit (extended).
5. Prepaid Insurance
  • Type: Asset (prepaid expense, permanent).
  • Adjustments: Credit adjustment (insurance expired: Prepaid Insurance Credit, Insurance Expense Debit).
  • Income Statement: No (asset).
  • Balance Sheet: Debit (adjusted).
  • So: Adjustments Credit (if adjusting), Balance Sheet Debit (extended).
6. Accounts Payable—Suburban Office Supplies
  • Type: Liability (permanent account).
  • Adjustments: May have debit/credit (e.g., accrued expense: Credit).
  • Income Statement: No.
  • Balance Sheet: Credit (liabilities have credit balances).
  • So: Balance Sheet Credit.
7. K. Strand, Capital
  • Type: Equity (permanent account).
  • Adjustments: No (capital is adjusted via income summary and drawing, not directly in adjustments).
  • Income Statement: No.
  • Balance Sheet: Credit (equity has credit balance).
  • So: Balance Sheet Credit.
8. K. Strand, Drawing
  • Type: Equity (temporary, but closed to Capital; however, on worksheet, it’s extended to Balance Sheet (equity section, debit)).
  • Adjustments: No (drawing is not adjusted, just extended).
  • Income Statement: No.
  • Balance Sheet: Debit (drawing decreases equity, so debit in balance sheet’s equity section).
  • So: Balance Sheet Debit.
9. Income Summary
  • Type: Temporary (used for closing).
  • Adjustments: No (adjustments are for other accounts; Income Summary is used in closing, not adjusted).
  • Income Statement: No (it’s a closing account, not revenue/expense).
  • Balance Sheet: No (temporary, closed to Capital).
  • So: No check (or if closing, but worksheet extends to... Wait, Income Summary is used in closing, so on worksheet, it may have no extension (or if used, but typically, it’s a temporary account with no balance sheet/income statement extension? Wait, no—Income Summary is debited/credited for closing, but on the worksheet, it’s part of the closing process. However, in the worksheet, Income Summary is usually in the Adjustments or Income Statement? Wait, no: Income Summary is used to close revenue/expense, so du…

Answer:

(Check Marks Summary):

AccountAdjustments DebitAdjustments CreditIncome Statement DebitIncome Statement CreditBalance Sheet DebitBalance Sheet Credit
2. Petty Cash✔
3. Accounts Receivable—Corner Bakery✔
4. Supplies✔ (if adjusting)✔ (extended)
5. Prepaid Insurance✔ (if adjusting)✔ (extended)
6. Accounts Payable—Suburban Office Supplies✔
7. K. Strand, Capital✔
8. K. Strand, Drawing✔
9. Income Summary
10. Sales✔
11. Advertising Expense✔
12. Cash Short and Over (Debit)✔
13. Insurance Expense✔ (if adjusting)✔ (extended)
14. Miscellaneous Expense✔
15. Rent Expense✔
16. Supplies Expense✔ (if adjusting)✔ (extended)
17. Utilities Expense✔

(Note: For accounts with adjustments, the "Adjustments" column check depends on whether an adjustment is made (e.g., Supplies, Prepaid Insurance, Insurance Expense, Supplies Expense have adjustments). For simplicity, assume typical adjustments for prepaid expenses and supplies, and extend to the appropriate statement/balance sheet column.)