Assignment
Part 1: COMPREHENSIVE PROBLEM ALTERNATIVE
Determining Adjustments
At the end of the first three month of operation, Evergreen Repair, Inc.'s trial balance is as follows.
|
Evergreen Repair, Inc.
Trial Balance
31-Mar-14
|
|
Cash
|
7983
|
|
|
Accounts Receivable
|
5872
|
|
|
Office Supplies
|
970
|
|
|
Prepaid Rent
|
1500
|
|
|
Equipment
|
5200
|
|
|
Accounts Payable
|
|
2629
|
|
Unearned Repair Revenue
|
|
1146
|
|
Common Stock
|
|
5000
|
|
Retained Earnings
|
|
6314
|
|
Dividends
|
1800
|
|
|
Repair Revenue
|
|
12,236
|
|
Wages Expense
|
3580
|
|
|
Office Cleaning Expense
|
420
|
|
|
|
27,325
|
27,325
|
Evergreen has hired an accountant to prepare financial statements to determine how well the company is doing after the three months. Upon examining the accounting records, the accountant finds the following items of interest:
a. An inventory of office supplies reveals supplies on hand of $469.
b. The prepaid rent account includes the rent for the first three months plus a deposit for April's rent.
c. Depreciation on the equipment for the first three months is $560.
d. The balance of the Unearned Repair Revenue Account represents a 12-month service contract paid in advance on February 1.
e. On March 31, accrued wages total $168.
f. Federal income taxes for the three months are estimated to be $1250.
REQUIRED
All adjustments affect one balance sheet account and one income statement account. For each of these situations, show the accounts affected, the amount of the adjustment (using a + or - to indicate an increase or decrease), and the balance of the account after the adjustment in the following format.
|
Balance
|
Amount of
|
Balance
|
Income
|
Amount of
|
Balance
|
|
Sheet
|
Adjustment
|
After
|
Statement
|
Adjustment
|
After
|
|
Account
|
(+ or -)
|
Adjustment
|
Account
|
(+ or -)
|
Adjustment
|
Part 2: COMPREHENSIVE PROBLEM SUPPLEMENT
Preparation of a Worksheet, Financial Statements, and Adjusting and Closing Entries
At the end of the fiscal year, Siglo delivery Service, Inc.'s trial balance appeared as follows:
|
Siglo Delivery Service, Inc.
Trial balance
31-Aug-14
|
|
Cash
|
10072
|
|
|
Accounts receivable
|
29314
|
|
|
Prepaid Insurance
|
5340
|
|
|
Delivery Supplies
|
14700
|
|
|
Office Supplies
|
2460
|
|
|
Land
|
15000
|
|
|
Building
|
196,000
|
|
|
Accumulated depreciation-Building
|
|
53400
|
|
Trucks
|
103,800
|
|
|
Accumulated Depreciation Trucks
|
|
30,900
|
|
Office Equipment
|
15,900
|
|
|
Accumulated Depreciation-Office Equipment
|
|
10,800
|
|
Accounts Payable
|
|
9396
|
|
Unearned Lockbox fees
|
|
8340
|
|
Mortgage Payable
|
|
72,000
|
|
Common Stock
|
|
100,000
|
|
Retained Earnings
|
|
28730
|
|
Dividends
|
30,000
|
|
|
Delivery service revenue
|
|
283,470
|
|
Lockbox Fee earned
|
|
28800
|
|
Truck Drivers Wages Expense
|
120,600
|
|
|
Office Salaries Expense
|
44,400
|
|
|
Gas, Oil, and Truck Repairs Expense
|
31050
|
|
|
Interest Expense
|
7200
|
|
|
|
625,836
|
625,836
|
REQUIRED
1. Enter the trial balance amounts in the Trial Balance columns of a worksheet and complete the worksheet using the information that follows:
a. Expired insurance, $3060
b. Inventory of unused delivery supplies, $1430
c. Inventory of unused office supplies, $186
d. Estimated depreciation on the building, $14,400
e. Estimated depreciation on the trucks, $15,450
f. Estimated depreciation on the office equipment, $2,700
g. The company credits the lockbox fees of customer who pay in advance to the Unearned lockbox fees account. Of the amount credited, to this account during the year, $5630 had been earned by August 31.
h. Lockbox fee earned but unrecorded and uncollected at the end of the accounting period, $816.
i. Accrued but unpaid truck drivers' wages at the end of the year, $1920
2. Prepare an income statement, a statement of retained earnings, and a balance sheet for the company.
3. Prepare adjusting and closing entries from the worksheet.
4. Can the worksheet be used as a substitute for the financial statement? Explain your answer.