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Concept explainers
Concept Introduction:
10-Column Worksheet:
10-column worksheet consists of detailed financial information during an accounting period regarding unadjusted
Requirement 1:
To Prepare:
Prepare 10-column worksheet for Ace Construction Co.
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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 | $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 |
Concept Introduction:
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
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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 | 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 | ||
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.
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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 |
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