Steps in Accounting cycle: Accounting cycle is the series of steps of accounting process which processes transactions into financial statements. The steps of accounting cycle are as follows: Collecting transactions and events Recording journal entries for transactions and events Posting the journal entries into ledgers Preparing unadjusted trial balance from ledger balances Recording adjusting entries Posting adjusting entries into ledgers and Preparing adjusted trial balance Preparing financial statements; Income statement, balances sheet, statement of owner’s equity and Cash flow statements. Preparing Closing entries to close temporary accounts. Preparing post closing trial balance Recording reversing journal entries (Optional) Requirement-1: To prepare: 10 Column worksheet showing the unadjusted trial, adjustments and adjusted trial.

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 4, Problem 3GLP

To determine

Concept introduction:

Steps in Accounting cycle: Accounting cycle is the series of steps of accounting process which processes transactions into financial statements. The steps of accounting cycle are as follows:

Collecting transactions and events

Recording journal entries for transactions and events

Posting the journal entries into ledgers

Preparing unadjusted trial balance from ledger balances

Recording adjusting entries

Posting adjusting entries into ledgers and Preparing adjusted trial balance

Preparing financial statements; Income statement, balances sheet, statement of owner’s equity and Cash flow statements.

Preparing Closing entries to close temporary accounts.

Preparing post closing trial balance

Recording reversing journal entries (Optional)

Requirement-1:

To prepare: 10 Column worksheet showing the unadjusted trial, adjustments and adjusted trial.

Expert Solution

Answer to Problem 3GLP

Solution: 10 Column worksheet showing the unadjusted trial, adjustments and adjusted trial is as follows:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Unadjusted Trial		Adjustments		Adjusted Trial		Closing Entries		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	18,500				18,500				18,500
Supplies	9,900			6,600	3,300				3,300
Prepaid Insurance	7,200			3,800	3,400				3,400
Equipment	132,000				132,000				132,000
Accumulated depreciation- Equipment		26,250		8,400		34,650				34,650
Accounts Payable		6,800				6,800				6,800
Interest Payable		-		250		250				250
Rent Payable		-		500		500				500
Utilities Payable		-		650		650				650
Wages payable		-		1,800		1,800				1,800
Property taxes Payable		-		1,000		1,000				1,000
Long term notes payable		25,000				25,000				25,000
V. Ace Capital		88,660				88,660	33,000	30,890		86,550
V. Ace Withdrawals	33,000				33,000			33,000
Construction fees earned		132,100				132,100	132,100
Depreciation Expense- Equipment	-		8,400		8,400			8,400
Wages Expense	46,860		1,800		48,660			48,660
Interest Expense	2,750		250		3,000			3,000
Insurance expense	-		3,800		3,800			3,800
Rent Expense	12,000		500		12,500			12,500
Supplies Expense	-		6,600		6,600			6,600
Property taxes expense	7,800		1,000		8,800			8,800
Repairs Expense	2,910				2,910			2,910
Utilities Expense	5,890		650		6,540			6,540
Income Summary							132,100	132,100
Totals	278,810	278,810	23,000	23,000	291,410	291,410	165,100	165,100	157,200	157,200

Explanation of Solution

Explanation: The adjustment and closing entries are made using the following entries:

Adjusting Journal entries
S. No.	Account Titles	Debit	Credit

a.	Supplies Expense (9900-3300)	$ 6,600
	Supplies		$ 6,600
	(Being Supplies adjusted)

b.	Insurance Expense	$ 3,800
	Prepaid Insurance		$ 3,800
	(Being insurance expired)

c.	Depreciation Expense- Equipment	$ 8,400
	Accumulated depreciation- Equipment		$ 8,400
	(Being depreciation recorded)

d.	Utilities Expense	$ 650
	Utilities Payable		$ 650
	(Being expense payable recorded)

e.	Wages Expense	$ 1,800
	Wages payable		$ 1,800
	(Being wages payable recorded)

f.	Rent Expense	$ 500
	Rent payable		$ 500
	(Being Rent payable recorded)

g.	Property taxes expense	$ 1,000
	Property taxes Payable		$ 1,000
	(Being taxes payable recorded)

h.	Interest Expense	$ 250
	Interest Payable		$ 250
	(Being interest payable recorded)

Closing entries
Date	Account Titles	Debit	Credit

June. 30, 2017	Construction fees earned	$ 132,100
	Income Summary		$ 132,100
	(Being Revenue account closed)

June. 30, 2017	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
	(Being Expense accounts closed)

June. 30, 2017	Income Summary	$ 30,890
	V. Ace Capital		$ 30,890
	(Being Income Summary account closed)

June. 30, 2017	V. Ace Capital	$ 33,000
	V. Ace Withdrawals		$ 33,000
	(Being Withdrawal account closed)

To determine

Requirement-2:

To prepare: The adjusting and closing entries

Expert Solution

Answer to Problem 3GLP

Solution: The adjusting and closing entries are as follows:

Adjusting Journal entries
S. No.	Account Titles	Debit	Credit

a.	Supplies Expense (9900-3300)	$ 6,600
	Supplies		$ 6,600
	(Being Supplies adjusted)

b.	Insurance Expense	$ 3,800
	Prepaid Insurance		$ 3,800
	(Being insurance expired)

c.	Depreciation Expense- Equipment	$ 8,400
	Accumulated depreciation- Equipment		$ 8,400
	(Being depreciation recorded)

d.	Utilities Expense	$ 650
	Utilities Payable		$ 650
	(Being expense payable recorded)

e.	Wages Expense	$ 1,800
	Wages payable		$ 1,800
	(Being wages payable recorded)

f.	Rent Expense	$ 500
	Rent payable		$ 500
	(Being Rent payable recorded)

g.	Property taxes expense	$ 1,000
	Property taxes Payable		$ 1,000
	(Being taxes payable recorded)

h.	Interest Expense	$ 250
	Interest Payable		$ 250
	(Being interest payable recorded)

Closing entries
Date	Account Titles	Debit	Credit

June. 30, 2017	Construction fees earned	$ 132,100
	Income Summary		$ 132,100
	(Being Revenue account closed)

June. 30, 2017	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
	(Being Expense accounts closed)

June. 30, 2017	Income Summary	$ 30,890
	V. Ace Capital		$ 30,890
	(Being Income Summary account closed)

June. 30, 2017	V. Ace Capital	$ 33,000
	V. Ace Withdrawals		$ 33,000
	(Being Withdrawal account closed)

Explanation of Solution

Explanation: The adjusting and closing entries are prepared using the following worksheet:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Unadjusted Trial		Adjustments		Adjusted Trial		Closing Entries		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	18,500				18,500				18,500
Supplies	9,900			6,600	3,300				3,300
Prepaid Insurance	7,200			3,800	3,400				3,400
Equipment	132,000				132,000				132,000
Accumulated depreciation- Equipment		26,250		8,400		34,650				34,650
Accounts Payable		6,800				6,800				6,800
Interest Payable		-		250		250				250
Rent Payable		-		500		500				500
Utilities Payable		-		650		650				650
Wages payable		-		1,800		1,800				1,800
Property taxes Payable		-		1,000		1,000				1,000
Long term notes payable		25,000				25,000				25,000
V. Ace Capital		88,660				88,660	33,000	30,890		86,550
V. Ace Withdrawals	33,000				33,000			33,000
Construction fees earned		132,100				132,100	132,100
Depreciation Expense- Equipment	-		8,400		8,400			8,400
Wages Expense	46,860		1,800		48,660			48,660
Interest Expense	2,750		250		3,000			3,000
Insurance expense	-		3,800		3,800			3,800
Rent Expense	12,000		500		12,500			12,500
Supplies Expense	-		6,600		6,600			6,600
Property taxes expense	7,800		1,000		8,800			8,800
Repairs Expense	2,910				2,910			2,910
Utilities Expense	5,890		650		6,540			6,540
Income Summary							132,100	132,100
Totals	278,810	278,810	23,000	23,000	291,410	291,410	165,100	165,100	157,200	157,200

To determine

Requirement-3:

To prepare: The Income Statement, Statement of Owner’s Equity and classified balance Sheet

Expert Solution

Answer to Problem 3GLP

Solution: The Income Statement, Statement of Owner’s Equity and classified balance Sheet are as follows:

ACE CONSTRUCTION CO.
Income Statement
For the year ended June 30, 2017

Revenue:
Construction fees earned		$ 132,100
Less: 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 Expenses		$ 101,210
Net Income		$ 30,890

ACE CONSTRUCTION CO.
Statement of Owner's Equity
For the year ended June 30, 2017

Beginning Capital Balance		$ 53,660
Add: Capital Investment	$ 35,000
Add: Net Income	$ 30,890
Less: Withdrawals	$(33,000)
Net Change in Owner's Equity		$ 32,890
Owner's Equity		$ 86,550

ACE CONSTRUCTION CO.
Balance Sheet
as on June 30, 2017

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- Equipment	$ (34,650)	$ 97,350

TOTAL ASSETS		$ 122,550

LIABILITIES AND EQUITY:

Current Liabilities:
Accounts Payable	$ 6,800
Interest Payable	$ 250
Rent Payable	$ 500
Utilities Payable	$ 650
Wages payable	$ 1,800
Property taxes Payable	$ 1,000
Total Current Liabilities		$ 11,000

Long term Liabilities:
Long term notes payable		$ 25,000

Owner's Equity		$ 86,550

TOTAL LIABILITIES AND EQUITY		$ 122,550

Explanation of Solution

The Income Statement, Statement of Owner’s Equity and classified balance Sheet are prepared using the adjusted trial balance and closing trial balance as follows:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Adjusted Trial		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit
Cash	18,500		18,500
Supplies	3,300		3,300
Prepaid Insurance	3,400		3,400
Equipment	132,000		132,000
Accumulated depreciation- Equipment		34,650		34,650
Accounts Payable		6,800		6,800
Interest Payable		250		250
Rent Payable		500		500
Utilities Payable		650		650
Wages payable		1,800		1,800
Property taxes Payable		1,000		1,000
Long term notes payable		25,000		25,000
V. Ace Capital		88,660		86,550
V. Ace Withdrawals	33,000
Construction fees earned		132,100
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
Income Summary
Totals	291,410	291,410	157,200	157,200

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Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 4, Problem 3GLP

To determine

Concept introduction:

Steps in Accounting cycle: Accounting cycle is the series of steps of accounting process which processes transactions into financial statements. The steps of accounting cycle are as follows:

Collecting transactions and events

Recording journal entries for transactions and events

Posting the journal entries into ledgers

Preparing unadjusted trial balance from ledger balances

Recording adjusting entries

Posting adjusting entries into ledgers and Preparing adjusted trial balance

Preparing financial statements; Income statement, balances sheet, statement of owner’s equity and Cash flow statements.

Preparing Closing entries to close temporary accounts.

Preparing post closing trial balance

Recording reversing journal entries (Optional)

Requirement-1:

To prepare: 10 Column worksheet showing the unadjusted trial, adjustments and adjusted trial.

Expert Solution

Answer to Problem 3GLP

Solution: 10 Column worksheet showing the unadjusted trial, adjustments and adjusted trial is as follows:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Unadjusted Trial		Adjustments		Adjusted Trial		Closing Entries		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	18,500				18,500				18,500
Supplies	9,900			6,600	3,300				3,300
Prepaid Insurance	7,200			3,800	3,400				3,400
Equipment	132,000				132,000				132,000
Accumulated depreciation- Equipment		26,250		8,400		34,650				34,650
Accounts Payable		6,800				6,800				6,800
Interest Payable		-		250		250				250
Rent Payable		-		500		500				500
Utilities Payable		-		650		650				650
Wages payable		-		1,800		1,800				1,800
Property taxes Payable		-		1,000		1,000				1,000
Long term notes payable		25,000				25,000				25,000
V. Ace Capital		88,660				88,660	33,000	30,890		86,550
V. Ace Withdrawals	33,000				33,000			33,000
Construction fees earned		132,100				132,100	132,100
Depreciation Expense- Equipment	-		8,400		8,400			8,400
Wages Expense	46,860		1,800		48,660			48,660
Interest Expense	2,750		250		3,000			3,000
Insurance expense	-		3,800		3,800			3,800
Rent Expense	12,000		500		12,500			12,500
Supplies Expense	-		6,600		6,600			6,600
Property taxes expense	7,800		1,000		8,800			8,800
Repairs Expense	2,910				2,910			2,910
Utilities Expense	5,890		650		6,540			6,540
Income Summary							132,100	132,100
Totals	278,810	278,810	23,000	23,000	291,410	291,410	165,100	165,100	157,200	157,200

Explanation of Solution

Explanation: The adjustment and closing entries are made using the following entries:

Adjusting Journal entries
S. No.	Account Titles	Debit	Credit

a.	Supplies Expense (9900-3300)	$ 6,600
	Supplies		$ 6,600
	(Being Supplies adjusted)

b.	Insurance Expense	$ 3,800
	Prepaid Insurance		$ 3,800
	(Being insurance expired)

c.	Depreciation Expense- Equipment	$ 8,400
	Accumulated depreciation- Equipment		$ 8,400
	(Being depreciation recorded)

d.	Utilities Expense	$ 650
	Utilities Payable		$ 650
	(Being expense payable recorded)

e.	Wages Expense	$ 1,800
	Wages payable		$ 1,800
	(Being wages payable recorded)

f.	Rent Expense	$ 500
	Rent payable		$ 500
	(Being Rent payable recorded)

g.	Property taxes expense	$ 1,000
	Property taxes Payable		$ 1,000
	(Being taxes payable recorded)

h.	Interest Expense	$ 250
	Interest Payable		$ 250
	(Being interest payable recorded)

Closing entries
Date	Account Titles	Debit	Credit

June. 30, 2017	Construction fees earned	$ 132,100
	Income Summary		$ 132,100
	(Being Revenue account closed)

June. 30, 2017	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
	(Being Expense accounts closed)

June. 30, 2017	Income Summary	$ 30,890
	V. Ace Capital		$ 30,890
	(Being Income Summary account closed)

June. 30, 2017	V. Ace Capital	$ 33,000
	V. Ace Withdrawals		$ 33,000
	(Being Withdrawal account closed)

To determine

Requirement-2:

To prepare: The adjusting and closing entries

Expert Solution

Answer to Problem 3GLP

Solution: The adjusting and closing entries are as follows:

Adjusting Journal entries
S. No.	Account Titles	Debit	Credit

a.	Supplies Expense (9900-3300)	$ 6,600
	Supplies		$ 6,600
	(Being Supplies adjusted)

b.	Insurance Expense	$ 3,800
	Prepaid Insurance		$ 3,800
	(Being insurance expired)

c.	Depreciation Expense- Equipment	$ 8,400
	Accumulated depreciation- Equipment		$ 8,400
	(Being depreciation recorded)

d.	Utilities Expense	$ 650
	Utilities Payable		$ 650
	(Being expense payable recorded)

e.	Wages Expense	$ 1,800
	Wages payable		$ 1,800
	(Being wages payable recorded)

f.	Rent Expense	$ 500
	Rent payable		$ 500
	(Being Rent payable recorded)

g.	Property taxes expense	$ 1,000
	Property taxes Payable		$ 1,000
	(Being taxes payable recorded)

h.	Interest Expense	$ 250
	Interest Payable		$ 250
	(Being interest payable recorded)

Closing entries
Date	Account Titles	Debit	Credit

June. 30, 2017	Construction fees earned	$ 132,100
	Income Summary		$ 132,100
	(Being Revenue account closed)

June. 30, 2017	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
	(Being Expense accounts closed)

June. 30, 2017	Income Summary	$ 30,890
	V. Ace Capital		$ 30,890
	(Being Income Summary account closed)

June. 30, 2017	V. Ace Capital	$ 33,000
	V. Ace Withdrawals		$ 33,000
	(Being Withdrawal account closed)

Explanation of Solution

Explanation: The adjusting and closing entries are prepared using the following worksheet:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Unadjusted Trial		Adjustments		Adjusted Trial		Closing Entries		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	18,500				18,500				18,500
Supplies	9,900			6,600	3,300				3,300
Prepaid Insurance	7,200			3,800	3,400				3,400
Equipment	132,000				132,000				132,000
Accumulated depreciation- Equipment		26,250		8,400		34,650				34,650
Accounts Payable		6,800				6,800				6,800
Interest Payable		-		250		250				250
Rent Payable		-		500		500				500
Utilities Payable		-		650		650				650
Wages payable		-		1,800		1,800				1,800
Property taxes Payable		-		1,000		1,000				1,000
Long term notes payable		25,000				25,000				25,000
V. Ace Capital		88,660				88,660	33,000	30,890		86,550
V. Ace Withdrawals	33,000				33,000			33,000
Construction fees earned		132,100				132,100	132,100
Depreciation Expense- Equipment	-		8,400		8,400			8,400
Wages Expense	46,860		1,800		48,660			48,660
Interest Expense	2,750		250		3,000			3,000
Insurance expense	-		3,800		3,800			3,800
Rent Expense	12,000		500		12,500			12,500
Supplies Expense	-		6,600		6,600			6,600
Property taxes expense	7,800		1,000		8,800			8,800
Repairs Expense	2,910				2,910			2,910
Utilities Expense	5,890		650		6,540			6,540
Income Summary							132,100	132,100
Totals	278,810	278,810	23,000	23,000	291,410	291,410	165,100	165,100	157,200	157,200

To determine

Requirement-3:

To prepare: The Income Statement, Statement of Owner’s Equity and classified balance Sheet

Expert Solution

Answer to Problem 3GLP

Solution: The Income Statement, Statement of Owner’s Equity and classified balance Sheet are as follows:

ACE CONSTRUCTION CO.
Income Statement
For the year ended June 30, 2017

Revenue:
Construction fees earned		$ 132,100
Less: 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 Expenses		$ 101,210
Net Income		$ 30,890

ACE CONSTRUCTION CO.
Statement of Owner's Equity
For the year ended June 30, 2017

Beginning Capital Balance		$ 53,660
Add: Capital Investment	$ 35,000
Add: Net Income	$ 30,890
Less: Withdrawals	$(33,000)
Net Change in Owner's Equity		$ 32,890
Owner's Equity		$ 86,550

ACE CONSTRUCTION CO.
Balance Sheet
as on June 30, 2017

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- Equipment	$ (34,650)	$ 97,350

TOTAL ASSETS		$ 122,550

LIABILITIES AND EQUITY:

Current Liabilities:
Accounts Payable	$ 6,800
Interest Payable	$ 250
Rent Payable	$ 500
Utilities Payable	$ 650
Wages payable	$ 1,800
Property taxes Payable	$ 1,000
Total Current Liabilities		$ 11,000

Long term Liabilities:
Long term notes payable		$ 25,000

Owner's Equity		$ 86,550

TOTAL LIABILITIES AND EQUITY		$ 122,550

Explanation of Solution

The Income Statement, Statement of Owner’s Equity and classified balance Sheet are prepared using the adjusted trial balance and closing trial balance as follows:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Adjusted Trial		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit
Cash	18,500		18,500
Supplies	3,300		3,300
Prepaid Insurance	3,400		3,400
Equipment	132,000		132,000
Accumulated depreciation- Equipment		34,650		34,650
Accounts Payable		6,800		6,800
Interest Payable		250		250
Rent Payable		500		500
Utilities Payable		650		650
Wages payable		1,800		1,800
Property taxes Payable		1,000		1,000
Long term notes payable		25,000		25,000
V. Ace Capital		88,660		86,550
V. Ace Withdrawals	33,000
Construction fees earned		132,100
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
Income Summary
Totals	291,410	291,410	157,200	157,200

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 4, Problem 3GLP

To determine

Concept introduction:

Steps in Accounting cycle: Accounting cycle is the series of steps of accounting process which processes transactions into financial statements. The steps of accounting cycle are as follows:

Collecting transactions and events

Recording journal entries for transactions and events

Posting the journal entries into ledgers

Preparing unadjusted trial balance from ledger balances

Recording adjusting entries

Posting adjusting entries into ledgers and Preparing adjusted trial balance

Preparing financial statements; Income statement, balances sheet, statement of owner’s equity and Cash flow statements.

Preparing Closing entries to close temporary accounts.

Preparing post closing trial balance

Recording reversing journal entries (Optional)

Requirement-1:

To prepare: 10 Column worksheet showing the unadjusted trial, adjustments and adjusted trial.

Expert Solution

Answer to Problem 3GLP

Solution: 10 Column worksheet showing the unadjusted trial, adjustments and adjusted trial is as follows:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Unadjusted Trial		Adjustments		Adjusted Trial		Closing Entries		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	18,500				18,500				18,500
Supplies	9,900			6,600	3,300				3,300
Prepaid Insurance	7,200			3,800	3,400				3,400
Equipment	132,000				132,000				132,000
Accumulated depreciation- Equipment		26,250		8,400		34,650				34,650
Accounts Payable		6,800				6,800				6,800
Interest Payable		-		250		250				250
Rent Payable		-		500		500				500
Utilities Payable		-		650		650				650
Wages payable		-		1,800		1,800				1,800
Property taxes Payable		-		1,000		1,000				1,000
Long term notes payable		25,000				25,000				25,000
V. Ace Capital		88,660				88,660	33,000	30,890		86,550
V. Ace Withdrawals	33,000				33,000			33,000
Construction fees earned		132,100				132,100	132,100
Depreciation Expense- Equipment	-		8,400		8,400			8,400
Wages Expense	46,860		1,800		48,660			48,660
Interest Expense	2,750		250		3,000			3,000
Insurance expense	-		3,800		3,800			3,800
Rent Expense	12,000		500		12,500			12,500
Supplies Expense	-		6,600		6,600			6,600
Property taxes expense	7,800		1,000		8,800			8,800
Repairs Expense	2,910				2,910			2,910
Utilities Expense	5,890		650		6,540			6,540
Income Summary							132,100	132,100
Totals	278,810	278,810	23,000	23,000	291,410	291,410	165,100	165,100	157,200	157,200

Explanation of Solution

Explanation: The adjustment and closing entries are made using the following entries:

Adjusting Journal entries
S. No.	Account Titles	Debit	Credit

a.	Supplies Expense (9900-3300)	$ 6,600
	Supplies		$ 6,600
	(Being Supplies adjusted)

b.	Insurance Expense	$ 3,800
	Prepaid Insurance		$ 3,800
	(Being insurance expired)

c.	Depreciation Expense- Equipment	$ 8,400
	Accumulated depreciation- Equipment		$ 8,400
	(Being depreciation recorded)

d.	Utilities Expense	$ 650
	Utilities Payable		$ 650
	(Being expense payable recorded)

e.	Wages Expense	$ 1,800
	Wages payable		$ 1,800
	(Being wages payable recorded)

f.	Rent Expense	$ 500
	Rent payable		$ 500
	(Being Rent payable recorded)

g.	Property taxes expense	$ 1,000
	Property taxes Payable		$ 1,000
	(Being taxes payable recorded)

h.	Interest Expense	$ 250
	Interest Payable		$ 250
	(Being interest payable recorded)

Closing entries
Date	Account Titles	Debit	Credit

June. 30, 2017	Construction fees earned	$ 132,100
	Income Summary		$ 132,100
	(Being Revenue account closed)

June. 30, 2017	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
	(Being Expense accounts closed)

June. 30, 2017	Income Summary	$ 30,890
	V. Ace Capital		$ 30,890
	(Being Income Summary account closed)

June. 30, 2017	V. Ace Capital	$ 33,000
	V. Ace Withdrawals		$ 33,000
	(Being Withdrawal account closed)

To determine

Requirement-2:

To prepare: The adjusting and closing entries

Expert Solution

Answer to Problem 3GLP

Solution: The adjusting and closing entries are as follows:

Adjusting Journal entries
S. No.	Account Titles	Debit	Credit

a.	Supplies Expense (9900-3300)	$ 6,600
	Supplies		$ 6,600
	(Being Supplies adjusted)

b.	Insurance Expense	$ 3,800
	Prepaid Insurance		$ 3,800
	(Being insurance expired)

c.	Depreciation Expense- Equipment	$ 8,400
	Accumulated depreciation- Equipment		$ 8,400
	(Being depreciation recorded)

d.	Utilities Expense	$ 650
	Utilities Payable		$ 650
	(Being expense payable recorded)

e.	Wages Expense	$ 1,800
	Wages payable		$ 1,800
	(Being wages payable recorded)

f.	Rent Expense	$ 500
	Rent payable		$ 500
	(Being Rent payable recorded)

g.	Property taxes expense	$ 1,000
	Property taxes Payable		$ 1,000
	(Being taxes payable recorded)

h.	Interest Expense	$ 250
	Interest Payable		$ 250
	(Being interest payable recorded)

Closing entries
Date	Account Titles	Debit	Credit

June. 30, 2017	Construction fees earned	$ 132,100
	Income Summary		$ 132,100
	(Being Revenue account closed)

June. 30, 2017	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
	(Being Expense accounts closed)

June. 30, 2017	Income Summary	$ 30,890
	V. Ace Capital		$ 30,890
	(Being Income Summary account closed)

June. 30, 2017	V. Ace Capital	$ 33,000
	V. Ace Withdrawals		$ 33,000
	(Being Withdrawal account closed)

Explanation of Solution

Explanation: The adjusting and closing entries are prepared using the following worksheet:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Unadjusted Trial		Adjustments		Adjusted Trial		Closing Entries		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	18,500				18,500				18,500
Supplies	9,900			6,600	3,300				3,300
Prepaid Insurance	7,200			3,800	3,400				3,400
Equipment	132,000				132,000				132,000
Accumulated depreciation- Equipment		26,250		8,400		34,650				34,650
Accounts Payable		6,800				6,800				6,800
Interest Payable		-		250		250				250
Rent Payable		-		500		500				500
Utilities Payable		-		650		650				650
Wages payable		-		1,800		1,800				1,800
Property taxes Payable		-		1,000		1,000				1,000
Long term notes payable		25,000				25,000				25,000
V. Ace Capital		88,660				88,660	33,000	30,890		86,550
V. Ace Withdrawals	33,000				33,000			33,000
Construction fees earned		132,100				132,100	132,100
Depreciation Expense- Equipment	-		8,400		8,400			8,400
Wages Expense	46,860		1,800		48,660			48,660
Interest Expense	2,750		250		3,000			3,000
Insurance expense	-		3,800		3,800			3,800
Rent Expense	12,000		500		12,500			12,500
Supplies Expense	-		6,600		6,600			6,600
Property taxes expense	7,800		1,000		8,800			8,800
Repairs Expense	2,910				2,910			2,910
Utilities Expense	5,890		650		6,540			6,540
Income Summary							132,100	132,100
Totals	278,810	278,810	23,000	23,000	291,410	291,410	165,100	165,100	157,200	157,200

To determine

Requirement-3:

To prepare: The Income Statement, Statement of Owner’s Equity and classified balance Sheet

Expert Solution

Answer to Problem 3GLP

Solution: The Income Statement, Statement of Owner’s Equity and classified balance Sheet are as follows:

ACE CONSTRUCTION CO.
Income Statement
For the year ended June 30, 2017

Revenue:
Construction fees earned		$ 132,100
Less: 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 Expenses		$ 101,210
Net Income		$ 30,890

ACE CONSTRUCTION CO.
Statement of Owner's Equity
For the year ended June 30, 2017

Beginning Capital Balance		$ 53,660
Add: Capital Investment	$ 35,000
Add: Net Income	$ 30,890
Less: Withdrawals	$(33,000)
Net Change in Owner's Equity		$ 32,890
Owner's Equity		$ 86,550

ACE CONSTRUCTION CO.
Balance Sheet
as on June 30, 2017

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- Equipment	$ (34,650)	$ 97,350

TOTAL ASSETS		$ 122,550

LIABILITIES AND EQUITY:

Current Liabilities:
Accounts Payable	$ 6,800
Interest Payable	$ 250
Rent Payable	$ 500
Utilities Payable	$ 650
Wages payable	$ 1,800
Property taxes Payable	$ 1,000
Total Current Liabilities		$ 11,000

Long term Liabilities:
Long term notes payable		$ 25,000

Owner's Equity		$ 86,550

TOTAL LIABILITIES AND EQUITY		$ 122,550

Explanation of Solution

The Income Statement, Statement of Owner’s Equity and classified balance Sheet are prepared using the adjusted trial balance and closing trial balance as follows:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Adjusted Trial		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit
Cash	18,500		18,500
Supplies	3,300		3,300
Prepaid Insurance	3,400		3,400
Equipment	132,000		132,000
Accumulated depreciation- Equipment		34,650		34,650
Accounts Payable		6,800		6,800
Interest Payable		250		250
Rent Payable		500		500
Utilities Payable		650		650
Wages payable		1,800		1,800
Property taxes Payable		1,000		1,000
Long term notes payable		25,000		25,000
V. Ace Capital		88,660		86,550
V. Ace Withdrawals	33,000
Construction fees earned		132,100
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
Income Summary
Totals	291,410	291,410	157,200	157,200

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 4, Problem 3GLP

To determine

Concept introduction:

Steps in Accounting cycle: Accounting cycle is the series of steps of accounting process which processes transactions into financial statements. The steps of accounting cycle are as follows:

Collecting transactions and events

Recording journal entries for transactions and events

Posting the journal entries into ledgers

Preparing unadjusted trial balance from ledger balances

Recording adjusting entries

Posting adjusting entries into ledgers and Preparing adjusted trial balance

Preparing financial statements; Income statement, balances sheet, statement of owner’s equity and Cash flow statements.

Preparing Closing entries to close temporary accounts.

Preparing post closing trial balance

Recording reversing journal entries (Optional)

Requirement-1:

To prepare: 10 Column worksheet showing the unadjusted trial, adjustments and adjusted trial.

Expert Solution

Answer to Problem 3GLP

Solution: 10 Column worksheet showing the unadjusted trial, adjustments and adjusted trial is as follows:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Unadjusted Trial		Adjustments		Adjusted Trial		Closing Entries		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	18,500				18,500				18,500
Supplies	9,900			6,600	3,300				3,300
Prepaid Insurance	7,200			3,800	3,400				3,400
Equipment	132,000				132,000				132,000
Accumulated depreciation- Equipment		26,250		8,400		34,650				34,650
Accounts Payable		6,800				6,800				6,800
Interest Payable		-		250		250				250
Rent Payable		-		500		500				500
Utilities Payable		-		650		650				650
Wages payable		-		1,800		1,800				1,800
Property taxes Payable		-		1,000		1,000				1,000
Long term notes payable		25,000				25,000				25,000
V. Ace Capital		88,660				88,660	33,000	30,890		86,550
V. Ace Withdrawals	33,000				33,000			33,000
Construction fees earned		132,100				132,100	132,100
Depreciation Expense- Equipment	-		8,400		8,400			8,400
Wages Expense	46,860		1,800		48,660			48,660
Interest Expense	2,750		250		3,000			3,000
Insurance expense	-		3,800		3,800			3,800
Rent Expense	12,000		500		12,500			12,500
Supplies Expense	-		6,600		6,600			6,600
Property taxes expense	7,800		1,000		8,800			8,800
Repairs Expense	2,910				2,910			2,910
Utilities Expense	5,890		650		6,540			6,540
Income Summary							132,100	132,100
Totals	278,810	278,810	23,000	23,000	291,410	291,410	165,100	165,100	157,200	157,200

Explanation of Solution

Explanation: The adjustment and closing entries are made using the following entries:

Adjusting Journal entries
S. No.	Account Titles	Debit	Credit

a.	Supplies Expense (9900-3300)	$ 6,600
	Supplies		$ 6,600
	(Being Supplies adjusted)

b.	Insurance Expense	$ 3,800
	Prepaid Insurance		$ 3,800
	(Being insurance expired)

c.	Depreciation Expense- Equipment	$ 8,400
	Accumulated depreciation- Equipment		$ 8,400
	(Being depreciation recorded)

d.	Utilities Expense	$ 650
	Utilities Payable		$ 650
	(Being expense payable recorded)

e.	Wages Expense	$ 1,800
	Wages payable		$ 1,800
	(Being wages payable recorded)

f.	Rent Expense	$ 500
	Rent payable		$ 500
	(Being Rent payable recorded)

g.	Property taxes expense	$ 1,000
	Property taxes Payable		$ 1,000
	(Being taxes payable recorded)

h.	Interest Expense	$ 250
	Interest Payable		$ 250
	(Being interest payable recorded)

Closing entries
Date	Account Titles	Debit	Credit

June. 30, 2017	Construction fees earned	$ 132,100
	Income Summary		$ 132,100
	(Being Revenue account closed)

June. 30, 2017	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
	(Being Expense accounts closed)

June. 30, 2017	Income Summary	$ 30,890
	V. Ace Capital		$ 30,890
	(Being Income Summary account closed)

June. 30, 2017	V. Ace Capital	$ 33,000
	V. Ace Withdrawals		$ 33,000
	(Being Withdrawal account closed)

To determine

Requirement-2:

To prepare: The adjusting and closing entries

Expert Solution

Answer to Problem 3GLP

Solution: The adjusting and closing entries are as follows:

Adjusting Journal entries
S. No.	Account Titles	Debit	Credit

a.	Supplies Expense (9900-3300)	$ 6,600
	Supplies		$ 6,600
	(Being Supplies adjusted)

b.	Insurance Expense	$ 3,800
	Prepaid Insurance		$ 3,800
	(Being insurance expired)

c.	Depreciation Expense- Equipment	$ 8,400
	Accumulated depreciation- Equipment		$ 8,400
	(Being depreciation recorded)

d.	Utilities Expense	$ 650
	Utilities Payable		$ 650
	(Being expense payable recorded)

e.	Wages Expense	$ 1,800
	Wages payable		$ 1,800
	(Being wages payable recorded)

f.	Rent Expense	$ 500
	Rent payable		$ 500
	(Being Rent payable recorded)

g.	Property taxes expense	$ 1,000
	Property taxes Payable		$ 1,000
	(Being taxes payable recorded)

h.	Interest Expense	$ 250
	Interest Payable		$ 250
	(Being interest payable recorded)

Closing entries
Date	Account Titles	Debit	Credit

June. 30, 2017	Construction fees earned	$ 132,100
	Income Summary		$ 132,100
	(Being Revenue account closed)

June. 30, 2017	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
	(Being Expense accounts closed)

June. 30, 2017	Income Summary	$ 30,890
	V. Ace Capital		$ 30,890
	(Being Income Summary account closed)

June. 30, 2017	V. Ace Capital	$ 33,000
	V. Ace Withdrawals		$ 33,000
	(Being Withdrawal account closed)

Explanation of Solution

Explanation: The adjusting and closing entries are prepared using the following worksheet:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Unadjusted Trial		Adjustments		Adjusted Trial		Closing Entries		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	18,500				18,500				18,500
Supplies	9,900			6,600	3,300				3,300
Prepaid Insurance	7,200			3,800	3,400				3,400
Equipment	132,000				132,000				132,000
Accumulated depreciation- Equipment		26,250		8,400		34,650				34,650
Accounts Payable		6,800				6,800				6,800
Interest Payable		-		250		250				250
Rent Payable		-		500		500				500
Utilities Payable		-		650		650				650
Wages payable		-		1,800		1,800				1,800
Property taxes Payable		-		1,000		1,000				1,000
Long term notes payable		25,000				25,000				25,000
V. Ace Capital		88,660				88,660	33,000	30,890		86,550
V. Ace Withdrawals	33,000				33,000			33,000
Construction fees earned		132,100				132,100	132,100
Depreciation Expense- Equipment	-		8,400		8,400			8,400
Wages Expense	46,860		1,800		48,660			48,660
Interest Expense	2,750		250		3,000			3,000
Insurance expense	-		3,800		3,800			3,800
Rent Expense	12,000		500		12,500			12,500
Supplies Expense	-		6,600		6,600			6,600
Property taxes expense	7,800		1,000		8,800			8,800
Repairs Expense	2,910				2,910			2,910
Utilities Expense	5,890		650		6,540			6,540
Income Summary							132,100	132,100
Totals	278,810	278,810	23,000	23,000	291,410	291,410	165,100	165,100	157,200	157,200

To determine

Requirement-3:

To prepare: The Income Statement, Statement of Owner’s Equity and classified balance Sheet

Expert Solution

Answer to Problem 3GLP

Solution: The Income Statement, Statement of Owner’s Equity and classified balance Sheet are as follows:

ACE CONSTRUCTION CO.
Income Statement
For the year ended June 30, 2017

Revenue:
Construction fees earned		$ 132,100
Less: 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 Expenses		$ 101,210
Net Income		$ 30,890

ACE CONSTRUCTION CO.
Statement of Owner's Equity
For the year ended June 30, 2017

Beginning Capital Balance		$ 53,660
Add: Capital Investment	$ 35,000
Add: Net Income	$ 30,890
Less: Withdrawals	$(33,000)
Net Change in Owner's Equity		$ 32,890
Owner's Equity		$ 86,550

ACE CONSTRUCTION CO.
Balance Sheet
as on June 30, 2017

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- Equipment	$ (34,650)	$ 97,350

TOTAL ASSETS		$ 122,550

LIABILITIES AND EQUITY:

Current Liabilities:
Accounts Payable	$ 6,800
Interest Payable	$ 250
Rent Payable	$ 500
Utilities Payable	$ 650
Wages payable	$ 1,800
Property taxes Payable	$ 1,000
Total Current Liabilities		$ 11,000

Long term Liabilities:
Long term notes payable		$ 25,000

Owner's Equity		$ 86,550

TOTAL LIABILITIES AND EQUITY		$ 122,550

Explanation of Solution

The Income Statement, Statement of Owner’s Equity and classified balance Sheet are prepared using the adjusted trial balance and closing trial balance as follows:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Adjusted Trial		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit
Cash	18,500		18,500
Supplies	3,300		3,300
Prepaid Insurance	3,400		3,400
Equipment	132,000		132,000
Accumulated depreciation- Equipment		34,650		34,650
Accounts Payable		6,800		6,800
Interest Payable		250		250
Rent Payable		500		500
Utilities Payable		650		650
Wages payable		1,800		1,800
Property taxes Payable		1,000		1,000
Long term notes payable		25,000		25,000
V. Ace Capital		88,660		86,550
V. Ace Withdrawals	33,000
Construction fees earned		132,100
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
Income Summary
Totals	291,410	291,410	157,200	157,200

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Answer 5

Chapter 4, Problem 3GLP

To determine

Concept introduction:

Steps in Accounting cycle: Accounting cycle is the series of steps of accounting process which processes transactions into financial statements. The steps of accounting cycle are as follows:

Collecting transactions and events

Recording journal entries for transactions and events

Posting the journal entries into ledgers

Preparing unadjusted trial balance from ledger balances

Recording adjusting entries

Posting adjusting entries into ledgers and Preparing adjusted trial balance

Preparing financial statements; Income statement, balances sheet, statement of owner’s equity and Cash flow statements.

Preparing Closing entries to close temporary accounts.

Preparing post closing trial balance

Recording reversing journal entries (Optional)

Requirement-1:

To prepare: 10 Column worksheet showing the unadjusted trial, adjustments and adjusted trial.

Expert Solution

Answer to Problem 3GLP

Solution: 10 Column worksheet showing the unadjusted trial, adjustments and adjusted trial is as follows:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Unadjusted Trial		Adjustments		Adjusted Trial		Closing Entries		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	18,500				18,500				18,500
Supplies	9,900			6,600	3,300				3,300
Prepaid Insurance	7,200			3,800	3,400				3,400
Equipment	132,000				132,000				132,000
Accumulated depreciation- Equipment		26,250		8,400		34,650				34,650
Accounts Payable		6,800				6,800				6,800
Interest Payable		-		250		250				250
Rent Payable		-		500		500				500
Utilities Payable		-		650		650				650
Wages payable		-		1,800		1,800				1,800
Property taxes Payable		-		1,000		1,000				1,000
Long term notes payable		25,000				25,000				25,000
V. Ace Capital		88,660				88,660	33,000	30,890		86,550
V. Ace Withdrawals	33,000				33,000			33,000
Construction fees earned		132,100				132,100	132,100
Depreciation Expense- Equipment	-		8,400		8,400			8,400
Wages Expense	46,860		1,800		48,660			48,660
Interest Expense	2,750		250		3,000			3,000
Insurance expense	-		3,800		3,800			3,800
Rent Expense	12,000		500		12,500			12,500
Supplies Expense	-		6,600		6,600			6,600
Property taxes expense	7,800		1,000		8,800			8,800
Repairs Expense	2,910				2,910			2,910
Utilities Expense	5,890		650		6,540			6,540
Income Summary							132,100	132,100
Totals	278,810	278,810	23,000	23,000	291,410	291,410	165,100	165,100	157,200	157,200

Explanation of Solution

Explanation: The adjustment and closing entries are made using the following entries:

Adjusting Journal entries
S. No.	Account Titles	Debit	Credit

a.	Supplies Expense (9900-3300)	$ 6,600
	Supplies		$ 6,600
	(Being Supplies adjusted)

b.	Insurance Expense	$ 3,800
	Prepaid Insurance		$ 3,800
	(Being insurance expired)

c.	Depreciation Expense- Equipment	$ 8,400
	Accumulated depreciation- Equipment		$ 8,400
	(Being depreciation recorded)

d.	Utilities Expense	$ 650
	Utilities Payable		$ 650
	(Being expense payable recorded)

e.	Wages Expense	$ 1,800
	Wages payable		$ 1,800
	(Being wages payable recorded)

f.	Rent Expense	$ 500
	Rent payable		$ 500
	(Being Rent payable recorded)

g.	Property taxes expense	$ 1,000
	Property taxes Payable		$ 1,000
	(Being taxes payable recorded)

h.	Interest Expense	$ 250
	Interest Payable		$ 250
	(Being interest payable recorded)

Closing entries
Date	Account Titles	Debit	Credit

June. 30, 2017	Construction fees earned	$ 132,100
	Income Summary		$ 132,100
	(Being Revenue account closed)

June. 30, 2017	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
	(Being Expense accounts closed)

June. 30, 2017	Income Summary	$ 30,890
	V. Ace Capital		$ 30,890
	(Being Income Summary account closed)

June. 30, 2017	V. Ace Capital	$ 33,000
	V. Ace Withdrawals		$ 33,000
	(Being Withdrawal account closed)

To determine

Requirement-2:

To prepare: The adjusting and closing entries

Expert Solution

Answer to Problem 3GLP

Solution: The adjusting and closing entries are as follows:

Adjusting Journal entries
S. No.	Account Titles	Debit	Credit

a.	Supplies Expense (9900-3300)	$ 6,600
	Supplies		$ 6,600
	(Being Supplies adjusted)

b.	Insurance Expense	$ 3,800
	Prepaid Insurance		$ 3,800
	(Being insurance expired)

c.	Depreciation Expense- Equipment	$ 8,400
	Accumulated depreciation- Equipment		$ 8,400
	(Being depreciation recorded)

d.	Utilities Expense	$ 650
	Utilities Payable		$ 650
	(Being expense payable recorded)

e.	Wages Expense	$ 1,800
	Wages payable		$ 1,800
	(Being wages payable recorded)

f.	Rent Expense	$ 500
	Rent payable		$ 500
	(Being Rent payable recorded)

g.	Property taxes expense	$ 1,000
	Property taxes Payable		$ 1,000
	(Being taxes payable recorded)

h.	Interest Expense	$ 250
	Interest Payable		$ 250
	(Being interest payable recorded)

Closing entries
Date	Account Titles	Debit	Credit

June. 30, 2017	Construction fees earned	$ 132,100
	Income Summary		$ 132,100
	(Being Revenue account closed)

June. 30, 2017	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
	(Being Expense accounts closed)

June. 30, 2017	Income Summary	$ 30,890
	V. Ace Capital		$ 30,890
	(Being Income Summary account closed)

June. 30, 2017	V. Ace Capital	$ 33,000
	V. Ace Withdrawals		$ 33,000
	(Being Withdrawal account closed)

Explanation of Solution

Explanation: The adjusting and closing entries are prepared using the following worksheet:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Unadjusted Trial		Adjustments		Adjusted Trial		Closing Entries		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	18,500				18,500				18,500
Supplies	9,900			6,600	3,300				3,300
Prepaid Insurance	7,200			3,800	3,400				3,400
Equipment	132,000				132,000				132,000
Accumulated depreciation- Equipment		26,250		8,400		34,650				34,650
Accounts Payable		6,800				6,800				6,800
Interest Payable		-		250		250				250
Rent Payable		-		500		500				500
Utilities Payable		-		650		650				650
Wages payable		-		1,800		1,800				1,800
Property taxes Payable		-		1,000		1,000				1,000
Long term notes payable		25,000				25,000				25,000
V. Ace Capital		88,660				88,660	33,000	30,890		86,550
V. Ace Withdrawals	33,000				33,000			33,000
Construction fees earned		132,100				132,100	132,100
Depreciation Expense- Equipment	-		8,400		8,400			8,400
Wages Expense	46,860		1,800		48,660			48,660
Interest Expense	2,750		250		3,000			3,000
Insurance expense	-		3,800		3,800			3,800
Rent Expense	12,000		500		12,500			12,500
Supplies Expense	-		6,600		6,600			6,600
Property taxes expense	7,800		1,000		8,800			8,800
Repairs Expense	2,910				2,910			2,910
Utilities Expense	5,890		650		6,540			6,540
Income Summary							132,100	132,100
Totals	278,810	278,810	23,000	23,000	291,410	291,410	165,100	165,100	157,200	157,200

To determine

Requirement-3:

To prepare: The Income Statement, Statement of Owner’s Equity and classified balance Sheet

Expert Solution

Answer to Problem 3GLP

Solution: The Income Statement, Statement of Owner’s Equity and classified balance Sheet are as follows:

ACE CONSTRUCTION CO.
Income Statement
For the year ended June 30, 2017

Revenue:
Construction fees earned		$ 132,100
Less: 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 Expenses		$ 101,210
Net Income		$ 30,890

ACE CONSTRUCTION CO.
Statement of Owner's Equity
For the year ended June 30, 2017

Beginning Capital Balance		$ 53,660
Add: Capital Investment	$ 35,000
Add: Net Income	$ 30,890
Less: Withdrawals	$(33,000)
Net Change in Owner's Equity		$ 32,890
Owner's Equity		$ 86,550

ACE CONSTRUCTION CO.
Balance Sheet
as on June 30, 2017

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- Equipment	$ (34,650)	$ 97,350

TOTAL ASSETS		$ 122,550

LIABILITIES AND EQUITY:

Current Liabilities:
Accounts Payable	$ 6,800
Interest Payable	$ 250
Rent Payable	$ 500
Utilities Payable	$ 650
Wages payable	$ 1,800
Property taxes Payable	$ 1,000
Total Current Liabilities		$ 11,000

Long term Liabilities:
Long term notes payable		$ 25,000

Owner's Equity		$ 86,550

TOTAL LIABILITIES AND EQUITY		$ 122,550

Explanation of Solution

The Income Statement, Statement of Owner’s Equity and classified balance Sheet are prepared using the adjusted trial balance and closing trial balance as follows:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Adjusted Trial		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit
Cash	18,500		18,500
Supplies	3,300		3,300
Prepaid Insurance	3,400		3,400
Equipment	132,000		132,000
Accumulated depreciation- Equipment		34,650		34,650
Accounts Payable		6,800		6,800
Interest Payable		250		250
Rent Payable		500		500
Utilities Payable		650		650
Wages payable		1,800		1,800
Property taxes Payable		1,000		1,000
Long term notes payable		25,000		25,000
V. Ace Capital		88,660		86,550
V. Ace Withdrawals	33,000
Construction fees earned		132,100
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
Income Summary
Totals	291,410	291,410	157,200	157,200

Answer 6

Chapter 4, Problem 3GLP

To determine

Concept introduction:

Steps in Accounting cycle: Accounting cycle is the series of steps of accounting process which processes transactions into financial statements. The steps of accounting cycle are as follows:

Collecting transactions and events

Recording journal entries for transactions and events

Posting the journal entries into ledgers

Preparing unadjusted trial balance from ledger balances

Recording adjusting entries

Posting adjusting entries into ledgers and Preparing adjusted trial balance

Preparing financial statements; Income statement, balances sheet, statement of owner’s equity and Cash flow statements.

Preparing Closing entries to close temporary accounts.

Preparing post closing trial balance

Recording reversing journal entries (Optional)

Requirement-1:

To prepare: 10 Column worksheet showing the unadjusted trial, adjustments and adjusted trial.

Expert Solution

Answer to Problem 3GLP

Solution: 10 Column worksheet showing the unadjusted trial, adjustments and adjusted trial is as follows:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Unadjusted Trial		Adjustments		Adjusted Trial		Closing Entries		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	18,500				18,500				18,500
Supplies	9,900			6,600	3,300				3,300
Prepaid Insurance	7,200			3,800	3,400				3,400
Equipment	132,000				132,000				132,000
Accumulated depreciation- Equipment		26,250		8,400		34,650				34,650
Accounts Payable		6,800				6,800				6,800
Interest Payable		-		250		250				250
Rent Payable		-		500		500				500
Utilities Payable		-		650		650				650
Wages payable		-		1,800		1,800				1,800
Property taxes Payable		-		1,000		1,000				1,000
Long term notes payable		25,000				25,000				25,000
V. Ace Capital		88,660				88,660	33,000	30,890		86,550
V. Ace Withdrawals	33,000				33,000			33,000
Construction fees earned		132,100				132,100	132,100
Depreciation Expense- Equipment	-		8,400		8,400			8,400
Wages Expense	46,860		1,800		48,660			48,660
Interest Expense	2,750		250		3,000			3,000
Insurance expense	-		3,800		3,800			3,800
Rent Expense	12,000		500		12,500			12,500
Supplies Expense	-		6,600		6,600			6,600
Property taxes expense	7,800		1,000		8,800			8,800
Repairs Expense	2,910				2,910			2,910
Utilities Expense	5,890		650		6,540			6,540
Income Summary							132,100	132,100
Totals	278,810	278,810	23,000	23,000	291,410	291,410	165,100	165,100	157,200	157,200

Explanation of Solution

Explanation: The adjustment and closing entries are made using the following entries:

Adjusting Journal entries
S. No.	Account Titles	Debit	Credit

a.	Supplies Expense (9900-3300)	$ 6,600
	Supplies		$ 6,600
	(Being Supplies adjusted)

b.	Insurance Expense	$ 3,800
	Prepaid Insurance		$ 3,800
	(Being insurance expired)

c.	Depreciation Expense- Equipment	$ 8,400
	Accumulated depreciation- Equipment		$ 8,400
	(Being depreciation recorded)

d.	Utilities Expense	$ 650
	Utilities Payable		$ 650
	(Being expense payable recorded)

e.	Wages Expense	$ 1,800
	Wages payable		$ 1,800
	(Being wages payable recorded)

f.	Rent Expense	$ 500
	Rent payable		$ 500
	(Being Rent payable recorded)

g.	Property taxes expense	$ 1,000
	Property taxes Payable		$ 1,000
	(Being taxes payable recorded)

h.	Interest Expense	$ 250
	Interest Payable		$ 250
	(Being interest payable recorded)

Closing entries
Date	Account Titles	Debit	Credit

June. 30, 2017	Construction fees earned	$ 132,100
	Income Summary		$ 132,100
	(Being Revenue account closed)

June. 30, 2017	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
	(Being Expense accounts closed)

June. 30, 2017	Income Summary	$ 30,890
	V. Ace Capital		$ 30,890
	(Being Income Summary account closed)

June. 30, 2017	V. Ace Capital	$ 33,000
	V. Ace Withdrawals		$ 33,000
	(Being Withdrawal account closed)

Answer 7

Chapter 4, Problem 3GLP

To determine

Concept introduction:

Steps in Accounting cycle: Accounting cycle is the series of steps of accounting process which processes transactions into financial statements. The steps of accounting cycle are as follows:

Collecting transactions and events

Recording journal entries for transactions and events

Posting the journal entries into ledgers

Preparing unadjusted trial balance from ledger balances

Recording adjusting entries

Posting adjusting entries into ledgers and Preparing adjusted trial balance

Preparing financial statements; Income statement, balances sheet, statement of owner’s equity and Cash flow statements.

Preparing Closing entries to close temporary accounts.

Preparing post closing trial balance

Recording reversing journal entries (Optional)

Requirement-1:

To prepare: 10 Column worksheet showing the unadjusted trial, adjustments and adjusted trial.

Answer 8

Expert Solution

Answer to Problem 3GLP

Solution: 10 Column worksheet showing the unadjusted trial, adjustments and adjusted trial is as follows:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Unadjusted Trial		Adjustments		Adjusted Trial		Closing Entries		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	18,500				18,500				18,500
Supplies	9,900			6,600	3,300				3,300
Prepaid Insurance	7,200			3,800	3,400				3,400
Equipment	132,000				132,000				132,000
Accumulated depreciation- Equipment		26,250		8,400		34,650				34,650
Accounts Payable		6,800				6,800				6,800
Interest Payable		-		250		250				250
Rent Payable		-		500		500				500
Utilities Payable		-		650		650				650
Wages payable		-		1,800		1,800				1,800
Property taxes Payable		-		1,000		1,000				1,000
Long term notes payable		25,000				25,000				25,000
V. Ace Capital		88,660				88,660	33,000	30,890		86,550
V. Ace Withdrawals	33,000				33,000			33,000
Construction fees earned		132,100				132,100	132,100
Depreciation Expense- Equipment	-		8,400		8,400			8,400
Wages Expense	46,860		1,800		48,660			48,660
Interest Expense	2,750		250		3,000			3,000
Insurance expense	-		3,800		3,800			3,800
Rent Expense	12,000		500		12,500			12,500
Supplies Expense	-		6,600		6,600			6,600
Property taxes expense	7,800		1,000		8,800			8,800
Repairs Expense	2,910				2,910			2,910
Utilities Expense	5,890		650		6,540			6,540
Income Summary							132,100	132,100
Totals	278,810	278,810	23,000	23,000	291,410	291,410	165,100	165,100	157,200	157,200

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Explanation: The adjustment and closing entries are made using the following entries:

Adjusting Journal entries
S. No.	Account Titles	Debit	Credit

a.	Supplies Expense (9900-3300)	$ 6,600
	Supplies		$ 6,600
	(Being Supplies adjusted)

b.	Insurance Expense	$ 3,800
	Prepaid Insurance		$ 3,800
	(Being insurance expired)

c.	Depreciation Expense- Equipment	$ 8,400
	Accumulated depreciation- Equipment		$ 8,400
	(Being depreciation recorded)

d.	Utilities Expense	$ 650
	Utilities Payable		$ 650
	(Being expense payable recorded)

e.	Wages Expense	$ 1,800
	Wages payable		$ 1,800
	(Being wages payable recorded)

f.	Rent Expense	$ 500
	Rent payable		$ 500
	(Being Rent payable recorded)

g.	Property taxes expense	$ 1,000
	Property taxes Payable		$ 1,000
	(Being taxes payable recorded)

h.	Interest Expense	$ 250
	Interest Payable		$ 250
	(Being interest payable recorded)

Closing entries
Date	Account Titles	Debit	Credit

June. 30, 2017	Construction fees earned	$ 132,100
	Income Summary		$ 132,100
	(Being Revenue account closed)

June. 30, 2017	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
	(Being Expense accounts closed)

June. 30, 2017	Income Summary	$ 30,890
	V. Ace Capital		$ 30,890
	(Being Income Summary account closed)

June. 30, 2017	V. Ace Capital	$ 33,000
	V. Ace Withdrawals		$ 33,000
	(Being Withdrawal account closed)

Answer 13

To determine

Requirement-2:

To prepare: The adjusting and closing entries

Expert Solution

Answer to Problem 3GLP

Solution: The adjusting and closing entries are as follows:

Adjusting Journal entries
S. No.	Account Titles	Debit	Credit

a.	Supplies Expense (9900-3300)	$ 6,600
	Supplies		$ 6,600
	(Being Supplies adjusted)

b.	Insurance Expense	$ 3,800
	Prepaid Insurance		$ 3,800
	(Being insurance expired)

c.	Depreciation Expense- Equipment	$ 8,400
	Accumulated depreciation- Equipment		$ 8,400
	(Being depreciation recorded)

d.	Utilities Expense	$ 650
	Utilities Payable		$ 650
	(Being expense payable recorded)

e.	Wages Expense	$ 1,800
	Wages payable		$ 1,800
	(Being wages payable recorded)

f.	Rent Expense	$ 500
	Rent payable		$ 500
	(Being Rent payable recorded)

g.	Property taxes expense	$ 1,000
	Property taxes Payable		$ 1,000
	(Being taxes payable recorded)

h.	Interest Expense	$ 250
	Interest Payable		$ 250
	(Being interest payable recorded)

Closing entries
Date	Account Titles	Debit	Credit

June. 30, 2017	Construction fees earned	$ 132,100
	Income Summary		$ 132,100
	(Being Revenue account closed)

June. 30, 2017	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
	(Being Expense accounts closed)

June. 30, 2017	Income Summary	$ 30,890
	V. Ace Capital		$ 30,890
	(Being Income Summary account closed)

June. 30, 2017	V. Ace Capital	$ 33,000
	V. Ace Withdrawals		$ 33,000
	(Being Withdrawal account closed)

Explanation of Solution

Explanation: The adjusting and closing entries are prepared using the following worksheet:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Unadjusted Trial		Adjustments		Adjusted Trial		Closing Entries		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	18,500				18,500				18,500
Supplies	9,900			6,600	3,300				3,300
Prepaid Insurance	7,200			3,800	3,400				3,400
Equipment	132,000				132,000				132,000
Accumulated depreciation- Equipment		26,250		8,400		34,650				34,650
Accounts Payable		6,800				6,800				6,800
Interest Payable		-		250		250				250
Rent Payable		-		500		500				500
Utilities Payable		-		650		650				650
Wages payable		-		1,800		1,800				1,800
Property taxes Payable		-		1,000		1,000				1,000
Long term notes payable		25,000				25,000				25,000
V. Ace Capital		88,660				88,660	33,000	30,890		86,550
V. Ace Withdrawals	33,000				33,000			33,000
Construction fees earned		132,100				132,100	132,100
Depreciation Expense- Equipment	-		8,400		8,400			8,400
Wages Expense	46,860		1,800		48,660			48,660
Interest Expense	2,750		250		3,000			3,000
Insurance expense	-		3,800		3,800			3,800
Rent Expense	12,000		500		12,500			12,500
Supplies Expense	-		6,600		6,600			6,600
Property taxes expense	7,800		1,000		8,800			8,800
Repairs Expense	2,910				2,910			2,910
Utilities Expense	5,890		650		6,540			6,540
Income Summary							132,100	132,100
Totals	278,810	278,810	23,000	23,000	291,410	291,410	165,100	165,100	157,200	157,200

Answer 14

To determine

Requirement-2:

To prepare: The adjusting and closing entries

Answer 15

Expert Solution

Answer to Problem 3GLP

Solution: The adjusting and closing entries are as follows:

Adjusting Journal entries
S. No.	Account Titles	Debit	Credit

a.	Supplies Expense (9900-3300)	$ 6,600
	Supplies		$ 6,600
	(Being Supplies adjusted)

b.	Insurance Expense	$ 3,800
	Prepaid Insurance		$ 3,800
	(Being insurance expired)

c.	Depreciation Expense- Equipment	$ 8,400
	Accumulated depreciation- Equipment		$ 8,400
	(Being depreciation recorded)

d.	Utilities Expense	$ 650
	Utilities Payable		$ 650
	(Being expense payable recorded)

e.	Wages Expense	$ 1,800
	Wages payable		$ 1,800
	(Being wages payable recorded)

f.	Rent Expense	$ 500
	Rent payable		$ 500
	(Being Rent payable recorded)

g.	Property taxes expense	$ 1,000
	Property taxes Payable		$ 1,000
	(Being taxes payable recorded)

h.	Interest Expense	$ 250
	Interest Payable		$ 250
	(Being interest payable recorded)

Closing entries
Date	Account Titles	Debit	Credit

June. 30, 2017	Construction fees earned	$ 132,100
	Income Summary		$ 132,100
	(Being Revenue account closed)

June. 30, 2017	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
	(Being Expense accounts closed)

June. 30, 2017	Income Summary	$ 30,890
	V. Ace Capital		$ 30,890
	(Being Income Summary account closed)

June. 30, 2017	V. Ace Capital	$ 33,000
	V. Ace Withdrawals		$ 33,000
	(Being Withdrawal account closed)

Answer 16

Expert Solution

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Explanation: The adjusting and closing entries are prepared using the following worksheet:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Unadjusted Trial		Adjustments		Adjusted Trial		Closing Entries		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	18,500				18,500				18,500
Supplies	9,900			6,600	3,300				3,300
Prepaid Insurance	7,200			3,800	3,400				3,400
Equipment	132,000				132,000				132,000
Accumulated depreciation- Equipment		26,250		8,400		34,650				34,650
Accounts Payable		6,800				6,800				6,800
Interest Payable		-		250		250				250
Rent Payable		-		500		500				500
Utilities Payable		-		650		650				650
Wages payable		-		1,800		1,800				1,800
Property taxes Payable		-		1,000		1,000				1,000
Long term notes payable		25,000				25,000				25,000
V. Ace Capital		88,660				88,660	33,000	30,890		86,550
V. Ace Withdrawals	33,000				33,000			33,000
Construction fees earned		132,100				132,100	132,100
Depreciation Expense- Equipment	-		8,400		8,400			8,400
Wages Expense	46,860		1,800		48,660			48,660
Interest Expense	2,750		250		3,000			3,000
Insurance expense	-		3,800		3,800			3,800
Rent Expense	12,000		500		12,500			12,500
Supplies Expense	-		6,600		6,600			6,600
Property taxes expense	7,800		1,000		8,800			8,800
Repairs Expense	2,910				2,910			2,910
Utilities Expense	5,890		650		6,540			6,540
Income Summary							132,100	132,100
Totals	278,810	278,810	23,000	23,000	291,410	291,410	165,100	165,100	157,200	157,200

Answer 20

To determine

Requirement-3:

To prepare: The Income Statement, Statement of Owner’s Equity and classified balance Sheet

Expert Solution

Answer to Problem 3GLP

Solution: The Income Statement, Statement of Owner’s Equity and classified balance Sheet are as follows:

ACE CONSTRUCTION CO.
Income Statement
For the year ended June 30, 2017

Revenue:
Construction fees earned		$ 132,100
Less: 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 Expenses		$ 101,210
Net Income		$ 30,890

ACE CONSTRUCTION CO.
Statement of Owner's Equity
For the year ended June 30, 2017

Beginning Capital Balance		$ 53,660
Add: Capital Investment	$ 35,000
Add: Net Income	$ 30,890
Less: Withdrawals	$(33,000)
Net Change in Owner's Equity		$ 32,890
Owner's Equity		$ 86,550

ACE CONSTRUCTION CO.
Balance Sheet
as on June 30, 2017

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- Equipment	$ (34,650)	$ 97,350

TOTAL ASSETS		$ 122,550

LIABILITIES AND EQUITY:

Current Liabilities:
Accounts Payable	$ 6,800
Interest Payable	$ 250
Rent Payable	$ 500
Utilities Payable	$ 650
Wages payable	$ 1,800
Property taxes Payable	$ 1,000
Total Current Liabilities		$ 11,000

Long term Liabilities:
Long term notes payable		$ 25,000

Owner's Equity		$ 86,550

TOTAL LIABILITIES AND EQUITY		$ 122,550

Explanation of Solution

The Income Statement, Statement of Owner’s Equity and classified balance Sheet are prepared using the adjusted trial balance and closing trial balance as follows:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Adjusted Trial		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit
Cash	18,500		18,500
Supplies	3,300		3,300
Prepaid Insurance	3,400		3,400
Equipment	132,000		132,000
Accumulated depreciation- Equipment		34,650		34,650
Accounts Payable		6,800		6,800
Interest Payable		250		250
Rent Payable		500		500
Utilities Payable		650		650
Wages payable		1,800		1,800
Property taxes Payable		1,000		1,000
Long term notes payable		25,000		25,000
V. Ace Capital		88,660		86,550
V. Ace Withdrawals	33,000
Construction fees earned		132,100
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
Income Summary
Totals	291,410	291,410	157,200	157,200

Answer 21

To determine

Requirement-3:

To prepare: The Income Statement, Statement of Owner’s Equity and classified balance Sheet

Answer 22

Expert Solution

Answer to Problem 3GLP

Solution: The Income Statement, Statement of Owner’s Equity and classified balance Sheet are as follows:

ACE CONSTRUCTION CO.
Income Statement
For the year ended June 30, 2017

Revenue:
Construction fees earned		$ 132,100
Less: 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 Expenses		$ 101,210
Net Income		$ 30,890

ACE CONSTRUCTION CO.
Statement of Owner's Equity
For the year ended June 30, 2017

Beginning Capital Balance		$ 53,660
Add: Capital Investment	$ 35,000
Add: Net Income	$ 30,890
Less: Withdrawals	$(33,000)
Net Change in Owner's Equity		$ 32,890
Owner's Equity		$ 86,550

ACE CONSTRUCTION CO.
Balance Sheet
as on June 30, 2017

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- Equipment	$ (34,650)	$ 97,350

TOTAL ASSETS		$ 122,550

LIABILITIES AND EQUITY:

Current Liabilities:
Accounts Payable	$ 6,800
Interest Payable	$ 250
Rent Payable	$ 500
Utilities Payable	$ 650
Wages payable	$ 1,800
Property taxes Payable	$ 1,000
Total Current Liabilities		$ 11,000

Long term Liabilities:
Long term notes payable		$ 25,000

Owner's Equity		$ 86,550

TOTAL LIABILITIES AND EQUITY		$ 122,550

Answer 23

Expert Solution

Answer 24

Expert Solution

Answer 25

Expert Solution

Answer 26

Explanation of Solution

The Income Statement, Statement of Owner’s Equity and classified balance Sheet are prepared using the adjusted trial balance and closing trial balance as follows:

ACE CONSTRUCTION CO.
Worksheet
As on June 30, 2017
	Adjusted Trial		Closing Trial Bal.
Account Title	Debit	Credit	Debit	Credit
Cash	18,500		18,500
Supplies	3,300		3,300
Prepaid Insurance	3,400		3,400
Equipment	132,000		132,000
Accumulated depreciation- Equipment		34,650		34,650
Accounts Payable		6,800		6,800
Interest Payable		250		250
Rent Payable		500		500
Utilities Payable		650		650
Wages payable		1,800		1,800
Property taxes Payable		1,000		1,000
Long term notes payable		25,000		25,000
V. Ace Capital		88,660		86,550
V. Ace Withdrawals	33,000
Construction fees earned		132,100
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
Income Summary
Totals	291,410	291,410	157,200	157,200