Chapter 4, Problem 9AP

Julio Theater Company’s trial balance at the end of its current fiscal year follows.

REQUIRED

1. 1. Enter Julio Theater’s trial balance amounts in the Trial Balance columns of a work sheet and complete the work sheet using the following information:
   1. a. Expired insurance, $34,800.
   2. b. Inventory of unused office supplies, $488.
   3. c. Inventory of unused cleaning supplies, $936.
   4. d. Estimated depreciation on the building, $28,000.
   5. e. Estimated depreciation on the theater furnishings, $72,000.
   6. f. Estimated depreciation on the office equipment, $6,320.
   7. g. The company credits all gift books sold during the year to the Gift Books Liability account. A gift book is a booklet of ticket coupons that is purchased in advance as a gift. The recipient redeems the coupons at some point in the future. On June 30 it was estimated that $75,600 worth of the gift books had been redeemed.
   8. h. Accrued but unpaid usher wages at the end of the accounting period, $1,720.
2. 2. Prepare an income statement, a statement of owner’s equity, and a balance sheet. Assume no additional investments by the owner, P. Julio.
3. 3. Prepare adjusting, closing, and, when necessary, reversing entries from the work sheet.
4. 4. BUSINESS APPLICATION ► Can the work sheet be used as a substitute for the financial statements? Explain your answer.