Question

 

The adjusted trial balance of Karise Repairs on December 31, 2017, follows.

KARISE REPAIRS Adjusted Trial Balance December 31, 2017
No.	Account Title	Debit				Credit
101	Cash	$	113,000
124	Office supplies		1,800
128	Prepaid insurance		2,850
167	Equipment		54,000
168	Accumulated depreciation—Equipment					$	5,400
201	Accounts payable						12,500
210	Wages payable						700
301	C. Karise, Capital						34,000
302	C. Karise, Withdrawals		15,000
401	Repair fees earned						199,750
612	Depreciation expense—Equipment		5,400
623	Wages expense		39,000
637	Insurance expense		1,000
640	Rent expense		12,500
650	Office supplies expense		4,300
690	Utilities expense		3,500
	Totals	$	252,350			$	252,350

Assume there are no owner investments in 2017.
  
Required:
1a. Prepare an income statement for the year 2017.
1b. Prepare a statement of owner's equity for the year 2017.
1c. Prepare a classified balance sheet at December 31, 2017.
2. Complete the work sheet using the adjusted trial balance in the first two columns of a six-column table. Use columns three and four for closing entry information and the last two columns for a post-closing trial balance.
3. Using information from the work sheet in Requirement 2, prepare the appropriate closing entries.

Answer 1

Income Statement
Item	Amount($)	Amount($)
Repair fees earned		199750
Less: Expenses:
Depreciation expense—Equipment	5400
Wages expense	39000
Insurance expense	1000
Rent expense	12500
Office supplies expense	4300
Utilities expense	3500	-65700
Net Income		134050

Equity Statement	Amount($)
C. Karise, Capital	34000
Less: C. Karise, Withdrawals	-15000
Net Income	134050
Equity	$153050

Balance Sheet
Assets	Amount ($)	Libilities	Amount ($)
Cash	113000	Accounts Payable	12500
Office Supplies	1800	Wages payable	700
Equipment                                                  54000		Equity	153050
Less: Accumulated Depreciation         5400	48600
Prepaid Insurance	2850
	$166250		$166250

Sl No	Date	Particulars	Debit($)	Credit($)
1	31-Dec	Repair fees earned	199750
		Income Summary		199750
		Closing Revenue Accounts
2	31-Dec	Income Summary	65700
		Depreciation expense—Equipment		5400
		Wages expense		39000
		Insurance expense		1000
		Rent expense		12500
		Office supplies expense		4300
		Utilities expense		3500
		Colsing of Expense Accounts
4	31-Dec	Income Summary	34000
		C. Karise, Capital		34000
		Colsing of Income Summary
5	31-Dec	C. Karise, Capital	15000
		C. Karise, Withdrawals		15000
		Slef Withdrawals adjusted to Capital.