Exercise Account (167)

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4-20
EXERCISE 4-9 (Continued)
(b) APACHI COMPANY
Balance Sheet
July 31, 2008
 
Assets
Current assets
Cash........................................................................... $14,840
Accounts receivable............................................. 8,780
Total current assets..................................... 23,620
Property, plant, and equipment
Equipment ............................................................... $15,900
Less: Accumulated depreciation.................... 7,400 8,500
Total assets .................................................... $32,120
Liabilities and Owner’s Equity
Current liabilities
Accounts payable ................................................. $ 4,220
Unearned rent revenue........................................ 1,800
Total current liabilities................................ 6,020
Owner’s equity
B. J. Apachi, Capital ............................................. 26,100
Total liabilities and owner’s equity......... $32,120
EXERCISE 4-10
1. False “Analyze business transactions” is the first step in the accounting
cycle.
2. False. Reversing entries are an optional step in the accounting cycle.
3. True.
4. True.
5. True.
6. False. Steps 1–3 may occur daily in the accounting cycle. Steps 4–7 are
performed on a periodic basis. Steps 8 and 9 are usually prepared only
at the end of a company’s annual accounting period.
7. False. The step of “journalize the transactions” occurs before the step
of “post to the ledger accounts.”
8. False. Closing entries are prepared after financial statements are prepared.