The following unadjusted trial balance is for Adams Construction Co. as of the end of its 2005 fiscal year. The June 30, 2004, credit balance of the owner’s capital account was $52,660, and the owner invested $25,000 cash in the company during the 2005 fiscal year.

No. Debit Credit
101. Cash…………………………………... $17,500
126. Supplies…………………………………... 8,900
128. Prepaid Insurance………………………... 6,200
167. Equipment……………………………... 131,000
168. Accumulated depreciation—Equipment……………………... $25,250
201. Accounts payable………………………………………………... 5,800
203. Interest payable………………………………………………………... 0
208. Rent payable…………………………………………………………... 0
210. Wages payable………………………………………………………... 0
213. Property taxes payable………………………………………………... 0
251. Long-term notes payable………………………………………... 24,000
301. S. Adams, Capital………………………………………………... 77,660
302. S. Adams, Withdrawals………………... 30,000
401. Construction fees earned………………………………………... 134,000
612. Depreciation expense—Equipment…………... 0
623. Wages expense…………………………... 45,860
633. Interest expense…………………………... 2,640
637. Insurance expense…………………... 0
640. Rent expense……………………………... 13,200
652. Supplies expense………………….……... 0
683. Property taxes expense……………... 4,600
684. Repairs expense…………….………... 2,810
690. Utilities expense………….…………... 4,000
Totals... $266,710 $266,710



Required
1. Prepare a 10-column work sheet for fiscal year 2005, starting with the unadjusted trial balance and including adjustments based on these additional facts:
a. The supplies available at the end of fiscal year 2005 had a cost of $3,200.
b. The cost of expired insurance for the fiscal year is $3,900.
c. Annual depreciation on equipment is $8,500.
d. The June utilities expense of $550 is not included in the unadjusted trial balance because the bill arrived after the trial balance was prepared. The $550 amount owed needs to be recorded.
e. The company’s employees have earned $1,600 of accrued wages at fiscal year-end.
f. The rent expense incurred and not yet paid or recorded at fiscal year-end is $200.
g. Additional property taxes of $900 have been assessed for this fiscal year but have not been paid or recorded in the accounts.
h. The long-term note payable bears interest at 1% per month. The unadjusted Interest Expense account equals the amount paid for the first 11 months of the 2005 fiscal year. The $240 accrued interest for June has not yet been paid or recorded. (Note that the company is required to make a $5,000 payment toward the note payable during the 2006 fiscal year.)

2. Use the work sheet to enter the adjusting and closing entries; then journalize them.

3. Prepare the income statement and the statement of owner’s equity for the year ended June 30 and the classified balance sheet at June 30, 2005.

Analysis Component
4. Analyze the following separate errors and describe how each would affect the 10-column work sheet. Explain whether the error is likely to be discovered in completing the work sheet and, if not, the effect of the error on the financial statements.
a. Assume that the adjustment for supplies used consisted of a credit to Supplies for $3,200 and a debit for $3,200 to Supplies Expense.
b. When the adjusted trial balance in the work sheet is completed, the $17,500 Cash balance is incorrectly entered in the Credit column.

Quote:

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Originally Posted by superhomer1221

The following unadjusted trial balance is for Adams Construction Co. as of the end of its 2005 fiscal year. The June 30, 2004, credit balance of the owner’s capital account was $52,660, and the owner invested $25,000 cash in the company during the 2005 fiscal year.

No. Debit Credit
101. Cash…………………………………........................$17,500
126. Supplies………………………………….......................8,900
128. Prepaid Insurance………………………..................6,200
167. Equipment…………………………….....................131,000
168. Accumulated depreciation—Equipment…………………….................... ........$25,250
201. Accounts payable………………………………………………......................... ..............5,800
203. Interest payable………………………………………………………...................... .................0
208. Rent payable…………………………………………………………..................... .....................0
210. Wages payable………………………………………………………...................... ....................0
213. Property taxes payable………………………………………………......................... ............0
251. Long-term notes payable………………………………………............................ .....24,000
301. S. Adams, Capital………………………………………………......................... ...........77,660
302. S. Adams, Withdrawals………………..................30,000
401. Construction fees earned………………………………………............................. ..134,000
612. Depreciation expense—Equipment…………..............0
623. Wages expense…………………………....................45,860
633. Interest expense…………………………....................2,640
637. Insurance expense…………………..............................0
640. Rent expense…………………………….....................13,200
652. Supplies expense………………….……...........................0
683. Property taxes expense……………......................4,600
684. Repairs expense…………….……….........................2,810
690. Utilities expense………….…………..........................4,000
Totals ...$266,710 $266,710



Required
1. Prepare a 10-column work sheet for fiscal year 2005, starting with the unadjusted trial balance and including adjustments based on these additional facts:
a. The supplies available at the end of fiscal year 2005 had a cost of $3,200.
b. The cost of expired insurance for the fiscal year is $3,900.
c. Annual depreciation on equipment is $8,500.
d. The June utilities expense of $550 is not included in the unadjusted trial balance because the bill arrived after the trial balance was prepared. The $550 amount owed needs to be recorded.
e. The company’s employees have earned $1,600 of accrued wages at fiscal year-end.
f. The rent expense incurred and not yet paid or recorded at fiscal year-end is $200.
g. Additional property taxes of $900 have been assessed for this fiscal year but have not been paid or recorded in the accounts.
h. The long-term note payable bears interest at 1% per month. The unadjusted Interest Expense account equals the amount paid for the first 11 months of the 2005 fiscal year. The $240 accrued interest for June has not yet been paid or recorded. (Note that the company is required to make a $5,000 payment toward the note payable during the 2006 fiscal year.)

2. Use the work sheet to enter the adjusting and closing entries; then journalize them.

3. Prepare the income statement and the statement of owner’s equity for the year ended June 30 and the classified balance sheet at June 30, 2005.

Analysis Component
4. Analyze the following separate errors and describe how each would affect the 10-column work sheet. Explain whether the error is likely to be discovered in completing the work sheet and, if not, the effect of the error on the financial statements.
a. Assume that the adjustment for supplies used consisted of a credit to Supplies for $3,200 and a debit for $3,200 to Supplies Expense.
b. When the adjusted trial balance in the work sheet is completed, the $17,500 Cash balance is incorrectly entered in the Credit column.

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I need help with this please, I am not understanding of what to do

This is funny, I want to know how to do this assignment I am not sure if I am to crect the work or if I am to make a new set up and you ask me to answer this. How do I get help?

Oh my, this is a very long problem. It would be impossible for someone to just get you through this entire thing all in one fell swoop. I can give you the starting point. I'm assuming the trial balance is already on the worksheet? If not, get that on there first and just list it exactly how you see it, using the first set of columns for "unadjusted trial balance."

The next step is doing all the adjusting entries. And unfortunately we're already kind of stuck here. Cause we're not here to just do the problems for you, and if you understood it just from looking at answers, you could've got that from the book. (Seeing answers doesn't always mean anything.) The topic takes up an entire chapter of most books and it's just a lot of stuff. I can't even give hints to 'get your started' because they are all different and there's really no starting point. What I can tell you is that they go into the second set of columns under "adjustments."

If you've been used to doing these on a 2-column journal, they are the same entries but will just look different. That is, instead of putting a debit on the first line and a matching credit on the second line, the two numbers will be in two different locations on the row with the account name. They will still equal, but it will look different. (Theoretically, you're supposed to go back later and do regular journal entries of these, as this is more like a piece of scrap paper.)

As for adjusting entries, since it's such a huge topic and since each one is different, could you possibly ask about these separately, or even as separate threads. i.e. maybe try the ones you think you might understand first and have those checked. And then ask about the areas where you're more confused. Otherwise I'd have to give a dissertation on an entire chapter. But I can help you in pieces. Can we try that? They don't have to be done in any specific order, so don't feel you have to do the first one first. And you need to get these done before you can even take the further steps after that.

And rodeodee, same for you, but I'd suggest starting your own thread, unless you maybe have specific comments or questions about something superhomer says.

Leader dots to make columns. Good idea and I'm mad I didn't think of something so simple. :rolleyes:

Quote:

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Originally Posted by morgaine300

Oh my, this is a very long problem. It would be impossible for someone to just get you through this entire thing all in one fell swoop. I can give you the starting point. I'm assuming the trial balance is already on the worksheet? If not, get that on there first and just list it exactly how you see it, using the first set of columns for "unadjusted trial balance."

The next step is doing all the adjusting entries. And unfortunately we're already kinda stuck here. Cause we're not here to just do the problems for you, and if you understood it just from looking at answers, you could've got that from the book. (Seeing answers doesn't always mean anything.) The topic takes up an entire chapter of most books and it's just a lot of stuff. I can't even give hints to 'get your started' because they are all different and there's really no starting point. What I can tell you is that they go into the second set of columns under "adjustments."

If you've been used to doing these on a 2-column journal, they are the same entries but will just look different. That is, instead of putting a debit on the first line and a matching credit on the second line, the two numbers will be in two different locations on the row with the account name. They will still equal, but it will look different. (Theoretically, you're supposed to go back later and do regular journal entries of these, as this is more like a piece of scrap paper.)

As for adjusting entries, since it's such a huge topic and since each one is different, could you possibly ask about these separately, or even as separate threads. i.e. maybe try the ones you think you might understand first and have those checked. And then ask about the areas where you're more confused. Otherwise I'd have to give a dissertation on an entire chapter. But I can help you in pieces. Can we try that? They don't have to be done in any specific order, so don't feel you have to do the first one first. And you need to get these done before you can even take the further steps after that.

And rodeodee, same for you, but I'd suggest starting your own thread, unless you maybe have specific comments or questions about something superhomer says.

Leader dots to make columns. Good idea and I'm mad I didn't think of something so simple. :rolleyes:

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Thank you for your help, yeah this is one that I am kind of on my own. It is a lot of typing to get this I just hope it comes to me easy. Thank you so much.

Quote:

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Originally Posted by rodeodee

Thank you for your help, yeah this is one that I am kind of on my own. It is a lot of typing to get this I just hope it comes to me easy. thank you so much.

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You're not necessarily "on your own." It just needs done in smaller pieces. i.e. ask about specific adjusting entries and just do things one or two at a time.

This is such a confusing topic, and each entry is so completely different, I think it would be nice to have a nice explanation with lots of examples some place I can link to. Maybe when my taxes are done (yes, us accounting people get lazy and run late with them too :p ), I might try to put something like that together.

Sorry want to jump in there because I am working on this exact problem and can not figure it out. I have already figured all of my adjusted amounts, assuming that I did them correctly. The problem is I keep coming up with a 3900 difference in my adjusted trial balance and of course my net income. I know the insurance is showing as an expired amount of 3900 but I have a credit of 3900 under prepaid insurance and a debit of 3900 under insurance exense in adjustments. I can't figure out where that is wrong. I also figured the monthly cost of the depreciated equipment to be 1400 by taking the 8500 and deducting it from the 25250 then times that by 12 since it is a fiscal year. That is how I came up with 1400, I then credited accumulated depreciation eqp by 1400 in adj and debited 1400 to depreciation equipment expense in adj. The last thing I can't figure out is problem H, is 240 debited under adj in insurance exp and then credited under interest payable? I would really appreciated any help at all.

Thank you,
Mel

Unadjusted Adjustments Adjusted Income Balance Sheet &
Trial Balance Trial Balance Statement Statement of
Owners Equity
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit

101 Cash 17,500 17,500 17,500
126 Supplies 8,900 5,700 3,200 3,200
128 Prepaid insurance 6,200 3,900 2,300 2,300
167 Equipment 131,000 131,000 131,000
168 Accumulated depreciation—Equip. 25,250 8,500 33,750 33,750
201 Accounts payable 5,800 550 6,350 6,350
203 Interest Payable 0 240 240 240
206 Rent Payable 0 200 200 200
210 Wages Payable 0 1,600 1,600 1,600
213 Property taxes Payable 0 900 900 900
251 Long Term Notes Payable 24,000 24,000 24,000
301 S. Adams Capitol 77,660 77,660 77,660
302 S, Adams Withdrawals 30,000 30,000 30,000
401 Construction Fees Earned 134,000 134,000 134,000
612 Depreciation expense—Equip. 0 8,500 8,500 8,500
623 Wages Expense 45,860 1,600 47,460 47,460
633 Interest Expense 2,640 240 2,880 2,880
637 Insurance Expense 3,900 3,900 3,900
640 Rent expense 13,200 200 13,400 13,400
652 Supplies expense 0 5,700 5,700 5,700
683 Property Taxes Expense 4,600 900 5,500 5,500
684 Repairs Expense 2,810 2,810 2,810
690 Utilities expense 4,000 550 4,550 4,550
Totals 266,710 266,710 21,590 21,590 278,700 278,700 94,700 134,000 184,000 144,700
Net Income 39,300 39,300
Totals 134,000 134,000 184,000 184,000

dubu25, we are not here to do people's homework for them. I also think the OP is not around anymore since the thread is two years old.

Quote:

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Originally Posted by dubu25

Unadjusted Adjustments Adjusted Income Balance Sheet &
Trial Balance Trial Balance Statement Statement of
Owners Equity
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit

101 Cash 17,500 17,500 17,500
126 Supplies 8,900 5,700 3,200 3,200
128 Prepaid insurance 6,200 3,900 2,300 2,300
167 Equipment 131,000 131,000 131,000
168 Accumulated depreciation—Equip. 25,250 8,500 33,750 33,750
201 Accounts payable 5,800 550 6,350 6,350
203 Interest Payable 0 240 240 240
206 Rent Payable 0 200 200 200
210 Wages Payable 0 1,600 1,600 1,600
213 Property taxes Payable 0 900 900 900
251 Long Term Notes Payable 24,000 24,000 24,000
301 S. Adams Capitol 77,660 77,660 77,660
302 S, Adams Withdrawals 30,000 30,000 30,000
401 Construction Fees Earned 134,000 134,000 134,000
612 Depreciation expense—Equip. 0 8,500 8,500 8,500
623 Wages Expense 45,860 1,600 47,460 47,460
633 Interest Expense 2,640 240 2,880 2,880
637 Insurance Expense 3,900 3,900 3,900
640 Rent expense 13,200 200 13,400 13,400
652 Supplies expense 0 5,700 5,700 5,700
683 Property Taxes Expense 4,600 900 5,500 5,500
684 Repairs Expense 2,810 2,810 2,810
690 Utilities expense 4,000 550 4,550 4,550
Totals 266,710 266,710 21,590 21,590 278,700 278,700 94,700 134,000 184,000 144,700
Net Income 39,300 39,300
Totals 134,000 134,000 184,000 184,000

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Thank you. I now see what I'm doing wrong.