Chapter 4, Problem P4.38BPGB

Completing the accounting cycle from adjusting entries to post-closing trial balance with an optional worksheet

Learning Objectives 1, 2, 3,4,5,6

5. Net Income $17,380

The unadjusted trial balance of Watson Anvils at December 31, 2018, and the data for the adjustments follow:

Adjustment data

1. Unearned Revenue still unearned at December 31,$3,600
2. Prepaid Rent still in force at December 31, $2,000.
3. Office Supplies used$600.
4. Depreciation, $400.
5. Accrued Salaries Expense at December 31, $180.

Requirements

1. Open the T-accounts using the balances in the unadjusted trial balance.
2. Complete the worksheet for the year ended December 31, 2018 (optional).
3. Prepare the adjusting entries, and post to the accounts.
4. Prepare an adjusted trial balance.
5. Prepare the income statement, the statement of owner's equity, and the classified balance sheet in report form. Assume that there were no contributions made by the owner during the year.
6. Prepare the closing entries, and post to the accounts.
7. Prepare a post-closing trial balance.
8. Calculate the current ratio for the company.