Chapter 2, Problem 2.20E

Worksheet

• Appendix 2A

The December 31, 2018, unadjusted trial balance for the Wolkstein Drug Company is presented below. December 31 is the company’s fiscal year-end.

Account Title	Debits	Credits
Cash	20,000
Accounts receivable	35,000
Prepaid rent	5,000
Inventory	50,000
Equipment	100,000
Accumulated depreciation—equipment		30,000
Accounts payable		25,000
Salaries and wages payable		–0–
Common stock		100,000
Retained earnings		29,000
Sales revenue		323,000
Cost of goods sold	180,000
Salaries and wages expense	71,000
Rent expense	30,000
Depreciation expense	–0–
Utility expense	12,000
Advertising expense	4,000
Totals	507,000	507,000

The following year-end adjusting entries are required:

a. Depreciation expense for the year on the equipment is $10,000.

b. Accrued salaries and wages payable at year-end should be $4,000.

Required:

1. Prepare and complete a worksheet similar to Illustration 2A–1.

2. Prepare an income statement for 2018 and a balance sheet as of December 31, 2018.