Post the adjusting entries to the ledger accounts enter the

Question

QUESTION 1:

Transactions that affect earnings do not necessarily affect cash. Identify the effect, if any, that each of the following transactions would have upon cash and net income. The first transaction has been completed as an example.(If an amount reduces the account balance then enter with negative sign preceding the number e.g. -15,000 or parentheses e.g. (15,000).)

		Cash		Net Income
(a) Purchased $110 of supplies for cash.		$-110		$0
(b) Recorded an adjusting entry to record use of $44 of the above supplies.
(c) Made sales of $1,299, all on account.
(d) Received $879 from customers in payment of their accounts.
(e) Purchased equipment for cash, $2,732.
(f) Recorded depreciation of building for period used, $768.

QUESTION 2:

The financial statements of Tootsie Roll are presented below.

TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Earnings, Comprehensive Earnings and Retained Earnings (in thousands except per share data)
			For the year ended December 31,
			2011			2010			2009
	Net product sales		$528,369			$517,149			$495,592
	Rental and royalty revenue		4,136			4,299			3,739
	Total revenue		532,505			521,448			499,331
	Product cost of goods sold		365,225			349,334			319,775
	Rental and royalty cost		1,038			1,088			852
	Total costs		366,263			350,422			320,627
	Product gross margin		163,144			167,815			175,817
	Rental and royalty gross margin		3,098			3,211			2,887
	Total gross margin		166,242			171,026			178,704
	Selling, marketing and administrative expenses		108,276			106,316			103,755
	Impairment charges		-			-			14,000
	Earnings from operations		57,966			64,710			60,949
	Other income (expense), net		2,946			8,358			2,100
	Earnings before income taxes		60,912			73,068			63,049
	Provision for income taxes		16,974			20,005			9,892
	Net earnings		$43,938			$53,063			$53,157
	Net earnings		$43,938			$53,063			$53,157
	Other comprehensive earnings (loss)		(8,740	)		1,183			2,845
	Comprehensive earnings		$35,198			$54,246			$56,002
	Retained earnings at beginning of year		$135,866			$147,687			$144,949
	Net earnings		43,938			53,063			53,157
	Cash dividends		(18,360	)		(18,078	)		(17,790	)
	Stock dividends		(47,175	)		(46,806	)		(32,629	)
	Retained earnings at end of year		$114,269			$135,866			$147,687
	Earnings per share		$0.76			$0.90			$0.89
	Average Common and Class B Common shares outstanding		57,892			58,685			59,425
(The accompanying notes are an integral part of these statements.)

	CONSOLIDATED STATEMENTS OF Financial Position TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in thousands except per share data)
	Assets			December 31,
				2011			2010
	CURRENT ASSETS:
		Cash and cash equivalents		$78,612			$115,976
		Investments		10,895			7,996
		Accounts receivable trade, less allowances of $1,731 and $1,531		41,895			37,394
		Other receivables		3,391			9,961
		Inventories:
		Finished goods and work-in-process		42,676			35,416
		Raw materials and supplies		29,084			21,236
		Prepaid expenses		5,070			6,499
		Deferred income taxes		578			689
		Total current assets		212,201			235,167
	PROPERTY, PLANT AND EQUIPMENT, at cost:
		Land		21,939			21,696
		Buildings		107,567			102,934
		Machinery and equipment		322,993			307,178
		Construction in progress		2,598			9,243
				455,097			440,974
		Less-Accumulated depreciation		242,935			225,482
		Net property, plant and equipment		212,162			215,492
	OTHER ASSETS:
		Goodwill		73,237			73,237
		Trademarks		175,024			175,024
		Investments		96,161			64,461
		Split dollar officer life insurance		74,209			74,441
		Prepaid expenses		3,212			6,680
		Equity method investment		3,935			4,254
		Deferred income taxes		7,715			9,203
		Total other assets		433,493			407,300
		Total assets		$857,856			$857,959
	Liabilities and Shareholders' Equity			December 31,
				2011			2010
	CURRENT LIABILITIES:
		Accounts payable		$10,683			$9,791
		Dividends payable		4,603			4,529
		Accrued liabilities		43,069			44,185
		Total current liabilities		58,355			58,505
	NONCURRENT LIABILITES:
		Deferred income taxes		43,521			47,865
		Postretirement health care and life insurance benefits		26,108			20,689
		Industrial development bonds		7,500			7,500
		Liability for uncertain tax positions		8,345			9,835
		Deferred compensation and other liabilities		48,092			46,157
		Total noncurrent liabilities		133,566			132,046
	SHAREHOLDERS' EQUITY:
		Common stock, $.69-4/9 par value-120,000 shares authorized-36,479 and 36,057 respectively, issued		25,333			25,040
		Class B common stock, $.69-4/9 par value-40,000 shares authorized-21,025 and 20,466 respectively, issued		14,601			14,212
		Capital in excess of par value		533,677			505,495
		Retained earnings, per accompanying statement		114,269			135,866
		Accumulated other comprehensive loss		(19,953	)		(11,213	)
		Treasury stock (at cost)-71 shares and 69 shares, respectively		(1,992	)		(1,992	)
		Total shareholders' equity		665,935			667,408
		Total liabilities and shareholders' equity		$857,856			$857,959

TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Cash Flows (in thousands)
					For the year ended December 31,
					2011			2010			2009
	CASH FLOWS FROM OPERATING ACTIVITIES:
		Net earnings			$43,938			$53,063			$53,157
		Adjustments to reconcile net earnings to net cash provided by operating activities:
			Depreciation		19,229			18,279			17,862
			Impairment charges		-			-			14,000
			Impairment of equity method investment		-			-			4,400
			Loss from equity method investment		194			342			233
			Amortization of marketable security premiums		1,267			522			320
			Changes in operating assets and liabilities:
			Accounts receivable		(5,448	)		717			(5,899	)
			Other receivables		3,963			(2,373	)		(2,088	)
			Inventories		(15,631	)		(1,447	)		455
			Prepaid expenses and other assets		5,106			4,936			5,203
			Accounts payable and accrued liabilities		84			2,180			(2,755	)
			Income taxes payable and deferred		(5,772	)		2,322			(12,543	)
			Postretirement health care and life insurance benefits		2,022			1,429			1,384
			Deferred compensation and other liabilities		2,146			2,525			2,960
			Others		(708	)		310			305
		Net cash provided by operating activities			50,390			82,805			76,994
	CASH FLOWS FROM INVESTING ACTIVITIES:
			Capital expenditures		(16,351	)		(12,813	)		(20,831	)
			Net purchase of trading securities		(3,234	)		(2,902	)		(1,713	)
			Purchase of available for sale securities		(39,252	)		(9,301	)		(11,331	)
			Sale and maturity of available for sale securities		7,680			8,208			17,511
			Net cash used in investing activities		(51,157	)		(16,808	)		(16,364	)
	CASH FLOWS FROM FINANCING ACTIVITIES:
			Shares repurchased and retired		(18,190	)		(22,881	)		(20,723	)
			Dividends paid in cash		(18,407	)		(18,130	)		(17,825	)
			Net cash used in financing activities		(36,597	)		(41,011	)		(38,548	)
	Increase (decrease) in cash and cash equivalents				(37,364	)		24,986			22,082
	Cash and cash equivalents at beginning of year				115,976			90,990			68,908
	Cash and cash equivalents at end of year				$78,612			$115,976			$90,990
	Supplemental cash flow information
			Income taxes paid		$16,906			$20,586			$22,364
			Interest paid		$38			$49			$182
			Stock dividend issued		$47,053			$46,683			$32,538
(The accompanying notes are an integral part of these statements.)

What was the amount of depreciation expense for 2011 and 2010? (You will need to examine the notes to the financial statements or the statement of cash flows.)

What was the cash paid for income taxes during 2011, reported at the bottom of the consolidated statement of cash flows? What was income tax expense (provision for income taxes) for 2011?

QUESTION 3:

The Solo Hotel opened for business on May 1, 2014. Here is its trial balance before adjustment on May 31.

SOLO HOTEL Trial Balance May 31, 2014
		Debit		Credit
Cash		$ 2,779
Supplies		2,600
Prepaid Insurance		1,800
Land		15,279
Buildings		71,200
Equipment		16,800
Accounts Payable				$ 4,979
Unearned Rent Revenue				3,300
Mortgage Payable				37,200
Common Stock				60,279
Rent Revenue				9,000
Salaries and Wages Expense		3,000
Utilities Expense		800
Advertising Expense		500
		$114,758		$114,758

Other data:

1. Insurance expires at the rate of $300 per month.
2. A count of supplies shows $1,174 of unused supplies on May 31.
3. (a) Annual depreciation is $3,720 on the building.
(b) Annual depreciation is $3,600 on equipment.
4. The mortgage interest rate is 6%. (The mortgage was taken out on May 1.)
5. Unearned rent of $2,690 has been earned.
6. Salaries of $650 are accrued and unpaid at May 31.

Journalize the adjusting entries on May 31.

Prepare a ledger using T-accounts. Enter the trial balance amounts and post the adjusting entries.

Prepare an adjusted trial balance on May 31.

Prepare an income statement for the month of May.

Prepare a retained earnings statement for the month of May.

Prepare a classified balance sheet at May 31.

QUESTION 4:

Ken Lumas started his own consulting firm, Lumas Consulting, on June 1, 2014. The trial balance at June 30 is as follows.

LUMAS CONSULTING Trial Balance June 30, 2014
		Debit		Credit
Cash		$ 6,850
Accounts Receivable		7,000
Supplies		2,059
Prepaid Insurance		3,480
Equipment		15,000
Accounts Payable				$ 4,280
Unearned Service Revenue				5,200
Common Stock				22,149
Service Revenue				8,000
Salaries and Wages Expense		4,000
Rent Expense		1,240
		$39,629		$39,629

In addition to those accounts listed on the trial balance, the chart of accounts for Lumas also contains the following accounts: Accumulated Depreciation-Equipment, Salaries and Wages Payable, Depreciation Expense, Insurance Expense, Utilities Expense, and Supplies Expense.

Other data:
1. Supplies on hand at June 30 total $720.
2. A utility bill for $235 has not been recorded and will not be paid until next month.
3. The insurance policy is for a year.
4. Services were performed for $4,114 of unearned service revenue by the end of the month.
5. Salaries of $1,439 are accrued at June 30.
6. The equipment has a 5-year life with no salvage value and is being depreciated at $250 per month for 60 months.
7. Invoices representing $4,252 of services performed during the month have not been recorded as of June 30.

Prepare the adjusting entries for the month of June.

Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances. (Use T-Accounts.)

Prepare an adjusted trial balance at June 30, 2014.