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    ch04 PDF

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    Nerissa Bangui

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    © All Rights Reserved
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    ch04 PDF

    Uploaded by

    Nerissa Bangui
    119 views3 pages

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    ch04.pdf

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    119 views3 pages

    ch04 PDF

    Uploaded by

    Nerissa Bangui

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    © All Rights Reserved
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    of 3

    Adjusting Entries

    4 and the Work Sheet


    DEMONSTRATION PROBLEM
    The general ledger of Ross Carpenters contains the following account balances for the year ended
    December 31.
    Cash $ 2,560 H. Ross, Capital $31,314
    Accounts Receivable 7,428 H. Ross, Drawing 60,000
    Prepaid Insurance 960 Income from Services 89,845
    Equipment 4,270 Wages Expense 21,500
    Accumulated Depreciation, Rent Expense 4,800
    Equipment 1,230 Supplies Expense 1,218
    Utilities Expense 1,344 Advertising Expense 1,216
    Truck 21,550 Insurance Expense 0
    Accumulated Depreciation, Truck 4,310 Depreciation Expense, Equipment 0
    Accounts Payable 426 Depreciation Expense, Truck 0
    Wages Payable 0 Miscellaneous Expense 279

    Since the firm has been in operation for longer than a year, Accumulated Depreciation, Equip-
    ment, and Accumulated Depreciation, Truck, have balances that should be included on the trial
    balance.
    Data for the year-end adjustments are as follows:
    a. Wages accrued at December 31, $448.
    b. Insurance expired during the year, $768.
    c. Depreciation of equipment during the year, $854.
    d. Depreciation of truck during the year, $4,310.

    Instructions
    Complete the work sheet for the year.

    Copyright Houghton Mifflin Company. All rights reserved. 1


    SOLUTION

    Ross Carpenters
    Work Sheet
    For the Year Ended December 31, 20

    TRIAL BALANCE ADJUSTMENTS


    ACCOUNT NAME DEBIT CREDIT DEBIT CREDIT

    1 Cash 2,560.00
    2 Accounts Receivable 7,428.00
    3 Prepaid Insurance 960.00 (b) 768.00
    4 Equipment 4,270.00
    5 Accumulated Depreciation, Equipment 1,230.00 (c) 854.00
    6 Truck 21,550.00
    7 Accumulated Depreciation, Truck 4,310.00 (d) 4,310.00
    8 Accounts Payable 426.00
    9 H. Ross, Capital 31,314.00
    10 H. Ross, Drawing 60,000.00
    11 Income from Services 89,845.00
    12 Wages Expense 21,500.00 (a) 448.00
    13 Rent Expense 4,800.00
    14 Supplies Expense 1,218.00
    15 Advertising Expense 1,216.00
    16 Utilities Expense 1,344.00
    17 Miscellaneous Expense 279.00
    18 127,125.00 127,125.00
    19 Wages Payable (a) 448.00
    20 Insurance Expense (b) 768.00
    21 Depreciation Expense, Equipment (c) 854.00
    22 Depreciation Expense, Truck (d) 4,310.00
    23 6,380.00 6,380.00
    24
    25 Net Income
    26
    27

    28
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    31

    32
    33
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    35

    Copyright Houghton Mifflin Company. All rights reserved. 2


    SOLUTION (continued)

    ADJUSTED TRIAL BALANCE INCOME STATEMENT BALANCE SHEET


    DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT

    2,560.00 2,560.00 1

    7,428.00 7,428.00 2

    192.00 192.00 3

    4,270.00 4,270.00 4

    2,084.00 2,084.00 5

    21,550.00 21,550.00 6

    8,620.00 8,620.00 7

    426.00 426.00 8

    31,314.00 31,314.00 9

    60,000.00 60,000.00 10

    89,845.00 89,845.00 11

    21,948.00 21,948.00 12

    4,800.00 4,800.00 13

    1,218.00 1,218.00 14

    1,216.00 1,216.00 15

    1,344.00 1,344.00 16

    279.00 279.00 17

    18

    448.00 448.00 19

    768.00 768.00 20

    854.00 854.00 21
    4,310.00 4,310.00 22

    132,737.00 132,737.00 36,737.00 89,845.00 96,000.00 42,892.00 23

    53,108.00 53,108.00 24

    89,845.00 89,845.00 96,000.00 96,000.00 25

    26
    27

    28
    29

    30
    31
    32

    33
    34

    35

    Copyright Houghton Mifflin Company. All rights reserved. 3

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