The following adjusted trial balance at December 31 of Wilson Trucking Company. Account Title Debit Credit Cash $ 8,900 Accounts receivable 18,400 Office supplies 3,900 Trucks 181,000 Accumulated depreciation—Trucks $ 36,900 Land 94,000 Accounts payable 14,700 Interest payable 4,900 Long-term notes payable 62,500 K. Wilson, Capital 179,000 K. Wilson, Withdrawals 20,900 Trucking revenue 139,000 Depreciation expense—Trucks 24,400 Salaries expense 63,700 Office supplies expense 8,900 Interest expense 12,900 Totals $ 437,000 $ 437,000 The K. Wilson, Capital account balance was $179,000 at December 31 of the prior year, and there were no owner investments during the year. (1) Prepare the income statement for the year ended December 31. (2) Prepare the statement of owner’s equity for the year ended December 31.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
The following adjusted
| Account Title | Debit | Credit |
|---|---|---|
| Cash | $ 8,900 | |
| Accounts receivable | 18,400 | |
| Office supplies | 3,900 | |
| Trucks | 181,000 | |
| $ 36,900 | ||
| Land | 94,000 | |
| Accounts payable | 14,700 | |
| Interest payable | 4,900 | |
| Long-term notes payable | 62,500 | |
| K. Wilson, Capital | 179,000 | |
| K. Wilson, Withdrawals | 20,900 | |
| Trucking revenue | 139,000 | |
| Depreciation expense—Trucks | 24,400 | |
| Salaries expense | 63,700 | |
| Office supplies expense | 8,900 | |
| Interest expense | 12,900 | |
| Totals | $ 437,000 | $ 437,000 |
The K. Wilson, Capital account balance was $179,000 at December 31 of the prior year, and there were no owner investments during the year.
(1) Prepare the income statement for the year ended December 31.
(2) Prepare the statement of owner’s equity for the year ended December 31.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 3 images
