Chapter 4, Problem 2APSA

To determine

Concept Introduction:

10-Column Worksheet:

10-column worksheet consists of detailed financial information during an accounting period regarding unadjusted trial balance, adjustments, adjusted trial balance, income statement and balance sheet.

Requirement 1:

To Prepare:

Prepare 10-column worksheet for Ace Construction Co.

Answer to Problem 2APSA

Particulars	Totals
Adjustment	$23,000
Adjusted trial balance	$291,410

Explanation of Solution

ACE CONSTRUCTION CO.Six-Column Worksheet June 30, 2019.
		Trial Balance		Adjustments		Adjusted Trial Balance		Income Statement		Balance Sheet
No.	Account Title	Dr.	Cr.	Dr.	Cr.	Dr.	Cr.	Dr.	Cr.	Dr.	Cr.
101	Cash	$18,500				$18,500				$18,500
126	Supplies	9,900			$6,600	3,300				3,300
128	Prepaid Insurance	7,200			3,800	3,400				3,400
167	Equipment	132,000				132,000				132,000
168	Accumulated Depreciation - Equipment		$26,250		8,400		$34,650				$34,650
201	Accounts Payable		6,800		650		7,450				7,450
203	Interest Payable		0		250		250				250
208	Rent Payable		0		500		500				500
210	Wages Payable		0		1,800		1,800				1,800
213	Property taxes payable		0		1,000		1,000				1,000
251	Long-term notes payable		25,000				25,000				25,000
301	V. Ace, Capital		88,660				88,660				88,660
302	V. Ace, Withdrawals	33,000				33,000				33,000
401	Construction fees earned		132,100				132,100		$132,100
612	Depreciation expense − Equipment	0		$8,400		8,400		8,400
623	Wages expense	46,860		1,800		48,660		48,660
633	Interest expense	2,750		250		3,000		3,000
637	Insurance expense	0		3,800		3,800		3,800
640	Rent expense	12,000		500		12,500		12,500
652	Supplies expense	0		6,600		6,600		6,600
683	Property taxes expense	7,800		1,000		8,800		8,800
684	Repairs expense	2,910				2,910		2,910
690	Utilities expense	5,890		650		6,540		6,540
	Totals	$278,810	$278,810	$23,000	$23,000	$291,410	$291,410	$101,210	$132,100
	Net Income							$30,890			$30,890
								$132,100	$132,100	$190,200	$190,200

To determine

Concept Introduction:

Adjusting Entries:The journal entries concerned with adjustments regarding accrual expenses and revenues are termed as adjusting entries.

Closing Entries:The journal entries which closes all the temporary account at the end of an accounting period is called closing entries.

Requirement 2:

Journal entries for the adjusting entries and closing entries as June 30, 2019

Answer to Problem 2APSA

		Balance
No.	Account Title	Adjusted	Closing
101	Cash	$18,500	$18,500
126	Supplies	3,300	3,300
128	Prepaid Insurance	3,400	3,400
167	Equipment	132,000	132,000
168	Accumulated Depreciation - Equipment	34,650	34,650
201	Accounts Payable	7,450	7,450
203	Interest Payable	250	250
208	Rent Payable	500	500
210	Wages Payable	1,800	1,800
213	Property taxes payable	1,000	1,000
251	Long-term notes payable	25,000	25,000
301	V. Ace, Capital	88,660	86,550
302	V. Ace, Withdrawals	33,000	0
401	Construction fees earned	132,100	0
612	Depreciation expense − Equipment	8,400	0
623	Wages expense	48,660	0
633	Interest expense	3,000	0
637	Insurance expense	3,800	0
640	Rent expense	12,500	0
652	Supplies expense	6,600	0
683	Property taxes expense	8,800	0
684	Repairs expense	2,910	0
690	Utilities expense	6,540	0

Explanation of Solution

Adjusting Entries

Date	Particulars	Debit	Credit
2019
June 30
a.	Supplies Expense	$6,600
	Supplies		$6,600
b.	Insurance Expense	3,800
	Prepaid Insurance		3,800
c.	Depreciation Expense − Equipment	8,400
	Accumulated Depreciation - Equipment		8,400
d.	Utilities Expense	650
	Accounts Payable		650
e.	Wages Expense	1,800
	Wages Payable
f.	Rent Expense	500
	Rent Payable		500
g.	Property Taxes Expense	1,000
	Property Taxes Payable		1,000
h.	Interest Expense	250
	Interest Payable		250

Closing Entries

Date	Particulars	Debit	Credit
2019
June 30
A.	Construction Fees Earned	$132,100
	Income Summary		$132,100
B.	Income Summary	101,210
	Depreciation expense − Equipment		8,400
	Wages expense		48,660
	Interest expense		3,000
	Insurance expense		3,800
	Rent expense		12,500
	Supplies expense		6,600
	Property taxes expense		8,800
	Repairs expense		2,910
	Utilities expense		6,540
C.	Income Summary	30,890
	V. Ace, Capital		30,890
D.	V. Ace, Capital	33,000
	V. Ace, Withdrawals		33,000

To determine

Concept Introduction:

Income Statement:The financial statement concerned with computation net income during an accounting period is called income statement. Net income is the excess amount of revenue over the expenses of a company and when the expenses are more than the revenue is termed as net loss.

Statement of Owner's Equity:It is a financial statement which shows the portion of owner's fund in the total capital of a company.

Classified Balance Sheet:A classified balance sheet interprets the financial position of a business during particular period under different categories i.e. current assets, current liabilities, non-current assets, long-term liabilities, property, plant and equipment and owner's equity.

Requirement 3:

To Prepare:

Prepare income statement, statement of owner's equity and balance sheet for the year ended June 30, 2019.

Answer to Problem 2APSA

Particulars	Amount
Income Statement	$30,890
Statement of Owner's Equity	$86,550
Balance Sheet	$122,550

Explanation of Solution

ACE CONSTRUCTION CO.Income Statement June 30, 2019
Revenue:
Construction Fees Earned		$132,100
Expenses:
Depreciation expense − Equipment	8,400
Wages expense	48,660
Interest expense	3,000
Insurance expense	3,800
Rent expense	12,500
Supplies expense	6,600
Property taxes expense	8,800
Repairs expense	2,910
Utilities expense	6,540
Total Expense		$101,210
Net Income		$30,890

ACE CONSTRUCTION CO.Statement of Owner's Equity June 30, 2019
V. Ace, Capital; June 30, 2018	$88,660
Add:Net Income	30,890
Subtotal	119,550
Less: V. Ace, Withdrawals	33,000
V. Ace, Capital; June 30, 2019	$86,550

ACE CONSTRUCTION CO.Balance Sheet June 30, 2019
Assets
Current Assets:
Cash	$18,500
Supplies	3,300
Prepaid Insurance	3,400
Total Current Assets		25,200
Property, Plant and Equipment
Equipment	132,000
Less: Accumulated Depreciation	34,650	97,350
Total Assets		$122,550
Liabilities and Owner's Equity
Liabilities
Current Liabilities:
Accounts Payable	7,450
Interest Payable	250
Rent Payable	500
Wages Payable	1,800
Property taxes payable	1,000
Total Current Liabilities		11,000
Long-Term Liabilities
Long-term notes payable		25,000
Total Liabilities		36,000
Owner's Equity
V. Ace, Capital; June 30, 2019		86,550
Total Liabilities and Owner's Equity		$122,550