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REQUIRED: a) Prepare the necessary adjusting journal entries on December 31. [Narrations are not required] b) Prepare Columbus Ltd multiple-step income statement for the year ended December 31, 2018. c) Prepare Columbus Ltd statement of owner's equity for the year ended December 31, 2018. d) Prepare Columbus Ltd classified balance sheet at December 31, 2018. e) Prepare the closing entries f) Prepare the post-closing trial balance

REQUIRED: a) Prepare the necessary adjusting journal entries on December 31. [Narrations are not required] b) Prepare Columbus Ltd multiple-step income statement for the year ended December 31, 2018. c) Prepare Columbus Ltd statement of owner's equity for the year ended December 31, 2018. d) Prepare Columbus Ltd classified balance sheet at December 31, 2018. e) Prepare the closing entries f) Prepare the post-closing trial balance

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following trial balance was extracted from the books of Columbus Ltd at December 31, the end of the company's financial year. The company is owned by John Columbus and is in the business of buying and farming supplies. Trial Balance as at December 31, 2018 Trial Balance A/C Name DR CR Cash Accounts receivable Allowance for bad debt Merchandise Inventory Store Supplies Prepaid Insurance Furniture and Fixtures Accumulated depreciation -Furniture and Fixtures Computer Equipment Accumulated depreciation Computer Equipment |Accounts payable Wages payable Unearned Sales revenue 1,000,000 450,000 15,000 186,000 120,000 450,000 1,000,000 360,000 600,000 320,000 150,000 Notes Payable, Long Term John Columbus, Capital John Columbus, Withdrawals 900,000 2,200,000 95,000 Sales revenue 1,761,000 Sales discount Sales returns and allowances Cost of goods sold Wages Expense Insurance Expense Depreciation Expense - Furniture and Fixtures Depreciation Expense -Computer Equipment Store Supplies Expense Utilities Expense Bad Debt Expense Interest Expense Total 120,000 95,000 650,000 450,000 180,000 40,000 180,000 90,000 5,706,000 5,706,000 The following additional information is available at December 31, 2018:
Transcribed Image Text:The following trial balance was extracted from the books of Columbus Ltd at December 31, the end of the company's financial year. The company is owned by John Columbus and is in the business of buying and farming supplies. Trial Balance as at December 31, 2018 Trial Balance A/C Name DR CR Cash Accounts receivable Allowance for bad debt Merchandise Inventory Store Supplies Prepaid Insurance Furniture and Fixtures Accumulated depreciation -Furniture and Fixtures Computer Equipment Accumulated depreciation Computer Equipment |Accounts payable Wages payable Unearned Sales revenue 1,000,000 450,000 15,000 186,000 120,000 450,000 1,000,000 360,000 600,000 320,000 150,000 Notes Payable, Long Term John Columbus, Capital John Columbus, Withdrawals 900,000 2,200,000 95,000 Sales revenue 1,761,000 Sales discount Sales returns and allowances Cost of goods sold Wages Expense Insurance Expense Depreciation Expense - Furniture and Fixtures Depreciation Expense -Computer Equipment Store Supplies Expense Utilities Expense Bad Debt Expense Interest Expense Total 120,000 95,000 650,000 450,000 180,000 40,000 180,000 90,000 5,706,000 5,706,000 The following additional information is available at December 31, 2018:
(i) Insurance of $450,000 was paid on May 1, 2018 for the 10-months to February 2019. (ii) The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $100,000. (iii) The computer equipment was acquired on March 1, 2018 and is being depreciated over 10 years on the double-declining method of depreciation, down to a residue of $60,000. (iv) Wages earned by employees NOT yet paid amounted to 15,000 at December 31, 2018. (v) A physical count of inventory at December 31, reveals $180,000 worth of inventory on hand. (vi) At December 31, $140,000 of the previously unearned sales revenue had been earned. (vii) The aging of the Accounts Receivable schedule at December 31 indicated that the estimated uncollectible on account receivable should be $45,000. REQUIRED: a) Prepare the necessary adjusting journal entries on December 31. [Narrations are not required] b) Prepare Columbus Ltd multiple-step income statement for the year ended December 31, 2018. c) Prepare Columbus Ltd statement of owner's equity for the year ended December 31, 2018. d) Prepare Columbus Ltd classified balance sheet at December 31, 2018. e) Prepare the closing entries f) Prepare the post-closing trial balance
Transcribed Image Text:(i) Insurance of $450,000 was paid on May 1, 2018 for the 10-months to February 2019. (ii) The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $100,000. (iii) The computer equipment was acquired on March 1, 2018 and is being depreciated over 10 years on the double-declining method of depreciation, down to a residue of $60,000. (iv) Wages earned by employees NOT yet paid amounted to 15,000 at December 31, 2018. (v) A physical count of inventory at December 31, reveals $180,000 worth of inventory on hand. (vi) At December 31, $140,000 of the previously unearned sales revenue had been earned. (vii) The aging of the Accounts Receivable schedule at December 31 indicated that the estimated uncollectible on account receivable should be $45,000. REQUIRED: a) Prepare the necessary adjusting journal entries on December 31. [Narrations are not required] b) Prepare Columbus Ltd multiple-step income statement for the year ended December 31, 2018. c) Prepare Columbus Ltd statement of owner's equity for the year ended December 31, 2018. d) Prepare Columbus Ltd classified balance sheet at December 31, 2018. e) Prepare the closing entries f) Prepare the post-closing trial balance
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