The following unadjusted trial balance is for Ace Construction Co. as of the end of its 2017 fiscal year. The June 30, 2016, credit balance of the owner’s capital account was $53,660, and the owner invested $35,000 cash in the company during the 2017 fiscal year. 1. Prepare and complete a 10-column work sheet for fiscal year 2017, starting with the unadjusted trial balance and including adjustments based on these additional facts. a. The supplies available at the end of fiscal year 2017 had a cost of $3,300. b. The cost of expired insurance for the fiscal year is $3,800. c. Annual depreciation on equipment is $8,400. d. The June utilities expense of $650 is not included in the unadjusted trial balance because the bill arrived after the trial balance was prepared. The $650 amount owed needs to be recorded. e. The company’s employees have earned $1,800 of accrued wages at fiscal year-end. f. The rent expense incurred and not yet paid or recorded at fiscal year-end is $500. g. Additional property taxes of $1,000 have been assessed for this fiscal year but hav

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Question

The following unadjusted trial balance is for Ace Construction Co. as of the end of its 2017 fiscal year. The June 30, 2016, credit balance of the owner’s capital account was $53,660, and the owner invested $35,000 cash in the company during the 2017 fiscal year.


1. Prepare and complete a 10-column work sheet for fiscal year 2017, starting with the unadjusted trial balance and including adjustments based on these additional facts.

a. The supplies available at the end of fiscal year 2017 had a cost of $3,300.

b. The cost of expired insurance for the fiscal year is $3,800.

c. Annual depreciation on equipment is $8,400.

d. The June utilities expense of $650 is not included in the unadjusted trial balance because the bill arrived after the trial balance was prepared. The $650 amount owed needs to be recorded.

e. The company’s employees have earned $1,800 of accrued wages at fiscal year-end.

f. The rent expense incurred and not yet paid or recorded at fiscal year-end is $500.

g. Additional property taxes of $1,000 have been assessed for this fiscal year but have not been paid or recorded in the accounts.

h. The long-term note payable bears interest at 12% per year. The unadjusted Interest Expense account equals the amount paid for the first 11 months of the 2017 fiscal year. The $250 accrued interest for June has not yet been paid or recorded. (The company is required to make a $5,000 payment toward the note payable during the 2018 fiscal year.)

2. Using information from the completed 10-column work sheet in part 1, journalize the adjusting entries and the closing entries.

3. Prepare the income statement and the statement of owner’s equity for the year ended June 30 and the classified balance sheet at June 30, 2017.

Analysis Component

4. Analyze the following separate errors and describe how each would affect the 10-column work sheet. Explain whether the error is likely to be discovered in completing the work sheet and, if not, the effect of the error on the financial statements.

a. Assume that the adjustment for supplies used consisted of a credit to Supplies and a debit to Supplies Expense for $3,300, when the correct amount was $6,600.

b. When the adjusted trial balance in the work sheet is completed, assume that the $18,500 Cash balance is incorrectly entered in the Credit column

A
B
D
1
ACE CONSTRUCTION CO.
Unadjusted Trial Balance
June 30, 2017
2
3
4 No. Account Title
5 101 Cash
6 126 Supplies
7 128 Prepaid insurance
8 167 Equipment
9 168 Accumulated depreciation-Equipment
10 201 Accounts payable
11 203 Interest payable
12 208 Rent payable
13 210 Wages payable
14 213 Property taxes payable
15 251 Long-term notes payable
16 301 V. Ace, Capital
|17 302 V. Ace, Withdrawals
18 401 Construction fees earned
19 612 Depreciation expense-Equipment
20 623 Wages expense
21 633 Interest expense
22 637 Insurance expense
23 640 Rent expense
24 652 Supplies expense
25 683 Property taxes expense
26 684 Repairs expense
27 690 Utilities expense
Debit
Credit
$ 18,500
9,900
7,200
132,000
$ 26,250
6,800
25,000
88,660
33,000
132,100
46,860
2,750
12,000
7,800
2,910
5,890
$278,810
28
Totals
$278,810
Transcribed Image Text:A B D 1 ACE CONSTRUCTION CO. Unadjusted Trial Balance June 30, 2017 2 3 4 No. Account Title 5 101 Cash 6 126 Supplies 7 128 Prepaid insurance 8 167 Equipment 9 168 Accumulated depreciation-Equipment 10 201 Accounts payable 11 203 Interest payable 12 208 Rent payable 13 210 Wages payable 14 213 Property taxes payable 15 251 Long-term notes payable 16 301 V. Ace, Capital |17 302 V. Ace, Withdrawals 18 401 Construction fees earned 19 612 Depreciation expense-Equipment 20 623 Wages expense 21 633 Interest expense 22 637 Insurance expense 23 640 Rent expense 24 652 Supplies expense 25 683 Property taxes expense 26 684 Repairs expense 27 690 Utilities expense Debit Credit $ 18,500 9,900 7,200 132,000 $ 26,250 6,800 25,000 88,660 33,000 132,100 46,860 2,750 12,000 7,800 2,910 5,890 $278,810 28 Totals $278,810
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 3 images

Blurred answer
Knowledge Booster
Completing the Accounting Cycle
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education