Prolme 3-4B Interpreting unadjusted and adjusted trial balances, and preparing financial statements P1 P2 P3 P4 P5 P6
A six-column table for JKL Company follows. The first two columns contain the unadjusted
Unadjusted Trial Balance Adjustments Unadjusted Trial Balance Cash $45.000 $ 45,000 Accounts receivable 60,000 66.660 Office supplies 40.000 17.000 Prepaid insurance 8,200 3.600 Office equipment 120,000 120,000Accumulated depreciation — Office equip $ 20.000 $ 30.000 Accounts payable 26.000 32,000 Interest payable 0 2,150 Salaries payable 0 16,000 Unearned consulting fees 40.000 27,800 Long-term notes payable 75.000 75,000 Z.Yan, Capital 80.200 80,200 Z. Van. Withdrawals 20,000 20.000 Consulting fees earned 234.600 253,460 Depredation expense— Office equip 0 10,000 Salaries expense 112.000 128.000 Interest expense 8.600 10.750 Insurance expense 0 4,600 Rent expense 20.000 20,000 Office supplies expense 0 23.000 Advertising expense 42,000 48.000 Totals $475,800 $475,800 $516,610 $516,610 Page 122
Required
Analysis Component
1. Analyze the differences between the unadjusted and adjusted trial balances to determine the eight adjustments that likely were made. Show the results of your analysis by inserting these adjustment amounts in the table's two middle columns. Label each adjustment with a letter a through h and provide a short description of each.
Preparation Component
2. Use the information in the adjusted trial balance to prepare the company's (a) income statement and its statement of owner's equity for the year ended July 31 [Note: J. Logan, Capital at July 31 of the peior year was $40,000, and the current-year withdrawals were $20,000] and (b) the balance sheet as of July 31.
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FUND. ACCOUNTING PRINCIPLES >CUSTOM<
- Corrected trial balance Tech Support Services has the following unadjusted trial balance as of January 31, 2018: Tech Support Services Unadjusted Trial Balance January 31, 2018 Debit Balances Credit Balances Cash 25,550 Accounts Receivable 44,050 Supplies 6,660 Prepaid Insurance 3,600 Equipment 162,000 Notes Payable 75,000 Accounts Payable 13,200 Common Stock 18,000 Retained Earnings 83,850 Dividends 33,000 Fees Earned 534,000 Wages Expense 306,000 Rent Expense 62,550 Advertising Expense 23,850 Gas, Electricity, and Water Expense 17,000 684,260 724,050 The debit and credit totals are not equal as a result of the following errors: A. The cash entered on the trial balance was overstated by 8,000. B. A cash receipt of 4,100 was posted as a debit to Cash of 1,400. C. A debit of 12,350 to Accounts Receivable was not posted. D. A return of 235 of defective supplies was erroneously posted as a 325 credit to Supplies. E. An insurance poky acquired at a cost of 3,000 was posted as a credit to Prepaid Insurance. F. The balance of Notes Payable was overstated by 21,000. G. A credit of 3,450 in Accounts Payable was overlooked when the balance of the account was determined. H. A debit of 6,000 for dividends was posted as a debit to Retained Earnings. I. The balance of 28,350 in Advertising Expense was entered as 23,850 in the trial balance. J. Miscellaneous Expense, with a balance of 4,600, was omitted from the trial balance. Instructions 1. Prepare a corrected unadjusted trial balance as of January 31, 2018. 2. Does the fact that the unadjusted (trial balance in (1) is balanced mean that there are no errors in the accounts? Explain.arrow_forwardMissing amounts from financial statements Obj.4 The financial statements at the end of Paradise Reaky’s first month of operations are shown 2. By analyzing the interrelationships among the financial statements, determine the proper amounts for (a) through (o).arrow_forwardAdjusting entries Reliable Repairs Service, an electronics repair store, prepared the following unadjusted trial balance at the end of its first year of operations: Reliable Repairs Service Unadjusted Trial Balance April 30,2018 Debit Balances Credit Balances Cash 10,350 Accounts Receivable 67,500 Supplies 16,200 Equipment 116,100 Accounts Payable 15,750 Unearned Fees 18,000 Common Stock 10,000 Retained Earnings 111,500 Dividends 13,500 Fees Earned 294,750 Wages Expense 94,500 Rent Expense 72,000 Utilities Expense 51,750 Miscellaneous Expense 8,100 450,000 450,000 For preparing the adjusting entries, the following data were assembled: Fees earned but unbilled on April 30 were 9,850. Supplies on hand on April 30 were 4,660. Depreciation of equipment was estimated to be 6,470 for the year. The balance in unearned fees represented the April 1 receipt in advance for services to be provided. During April, 15,000 of the services were provided. Unpaid wages accrued on April 30 were 5,200. Instructions 1. Journalize the adjusting entries necessary on April 30, 2018. 2. Determine the revenues, expenses, and net income of Reliable Repairs Service before the adjusting entries. 3. Determine the revenues, expense, and net income of Reliable Repairs Service after the adjusting entries. 4. Determine the effect of the adjusting entries on Retained Earnings.arrow_forward
- Adjusting entries and adjusted trial balances Rowland Company is a small editorial services company owned and operated by Marlene Rowland. On August 31, 2018, the end of the current year, Rowland Companys accounting clerk prepared the following unadjusted trial balance: Rowland Company Unadjusted Trial Balance August 31,2018 Debit Balances Credit Balances Cash 7,500 Accounts Receivable 38,400 Prepaid Insurance 7,200 Supplies 1,980 Land 112,500 Building 150,250 Accumulated DepreciationBuilding 87,550 Equipment 135,300 Accumulated DepreciationEquipment 97,950 Accounts Payable 12,150 Unearned Rent 6,750 Common Stock 75,000 Retained Earnings 146,000 Dividends 15,000 Fees Earned 324,600 Salaries and Wages Expense 193,370 Utilities Expense 42,375 Advertising Expense 22,800 Repairs Expense 17,250 Miscellaneous Expense 6,075 750,000 750,000 The data needed to determine year-end adjustments are as follows: Unexpired insurance at August 31, 6,000. Supplies on hand at August 31, 480. Depreciation of building for the year, 7,500. Depreciation of equipment for the year, 4,150. Rent unearned at August 31, 1,550. Accrued salaries and wages at August 31, 3,200. Fees earned but unbilled on August 31, 11,330. Instructions 1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Kent Revenue; Insurance Expense; Depreciation ExpenseBuilding; Depreciation ExpenseEquipment; and Supplies Expense. 2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance.arrow_forwardLedger accounts, adjusting entries, financial statements, and closing entries; optional spreadsheet The unadjusted trial balance of Lakota Freight Co. at March 31, 2018, the end of the year, follows: Lakota Freight Co. Unadjusted Trial Balance March 31, 2018 Account No. Debit Balances Credit Balances Cash................................................ 11 12,000 Supplies............................................ 13 30,000 Prepaid Insurance.................................... 14 3,600 Equipment.......................................... 16 110,000 Accumulated DepreciationEquipment............... 17 25,000 Trucks............................................... 18 60,000 Accumulated DepreciationTrucks................... 19 15,000 Accounts Payable.................................... 21 4,000 Common Stock...................................... 31 26,000 Retained Earnings................................... 32 70,000 Dividends........................................... 33 15,000 Service Revenue..................................... 41 160,000 Wages Expense...................................... 51 45,000 Rent Expense........................................ 53 10,600 Truck Expense....................................... 54 9,000 Miscellaneous Expense............................... 59 4,800 300,000 300,000 The data needed to determine year-end adjustments are as follows: (A) Supplies on hand at March 31 are 7,500. (B) Insurance premiums expired during year are 1,800. (C) Depreciation of equipment during year is 8,350. (D) Depreciation of trucks during year is 6,200. (E) Wages accrued but not paid at March 31 are 600. Instructions 1. For each account listed in the trial balance, enter the balance in the appropriate Balance column of a four-column account and place a check mark () in the Posting Reference column. 2. (Optional) Enter the unadjusted trial balance on an end-of-period spread sheet and complete the spreadsheet. Add the accounts listed in part (3) as needed. 3. Journalize and post the adjusting entries, inserting balances in the accounts affected. Record the adjusting entries on Page 26 of the journal. The following additional accounts from Lakota Freight Co.s chart of accounts should be used: Wages Payable, 22; Supplies Expense, 52; Depreciation ExpenseEquipment, 55; Depreciation ExpenseTrucks, 56; Insurance Expense, 57. 4. Prepare an adjusted trial balance. 5. Prepare an income statement, a retained earnings statement, and a balance sheet. 6. Journalize and post the closing entries. Record the closing entries on Page 27 of the journal. (Income Summary is account #34 in the chart of accounts.) Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry. 7. Prepare a post-closing trial balance.arrow_forwardAdjusting entries and adjusted trial balances Reece Financial Services Co., which specializes in appliance repair services, is owned and operated by Joni Reece. Reece Financial Services accounting clerk prepared the following unadjusted trial balance at July 31, 2018: Reece Financial Services Co Unadjusted Trial Balance July 31,2018 Debit Credit Balances Balances Cash 10,200 Accounts Receivable 34,750 Prepaid Insurance 6,000 Supplies 1,725 50,000 Building 155,750 Accumulated DepreciationBuilding 62,850 Equipment 45,000 Accumulated DepreciationEquipment 17,650 Accounts Payable 3,750 Unearned Rent 3,600 Common Stock 60,000 Retained Earnings 93,550 Dividends 8,000 Fees Earned 158,600 Salaries and Wages Expense 56,850 Utilities Expense 14,100 Advertising Expense 7,500 Repairs Expense 6,100 Miscellaneous Expense 4025 400,000 400,000 The data needed to determine year-end adjustments are as follows: Depreciation of building for the year, 6,400. Depreciation of equipment for the year, 2,800. Accrued salaries and wages at July 31, 900. Unexpired insurance at July 31, 1,500. Fees earned but unbilled on July 31, 10,200. Supplies on hand at July 31, 615. Rent unearned at July 31, 300. Instructions 1. Journalize the adjusting entries using the following additional accounts: .Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation ExpenseBuilding; Depreciation ExpenseEquipment; and Supplies Expense. 2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance.arrow_forward
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