Question

Following are the 12/31/17 unadjusted and adjusted trial balances for HW Co.
	HW Co.
	Unadjusted and Adjusted Trial Balances
	December 31, 2017
			Unadjusted		Adjusted
			DR	CR	DR	CR
	Cash		$16,000		$16,000
	Accounts Receivable		44,000		51,800
	Allowance for Doubtful Accounts			125		1,680
	Supplies		17,500		6,800
	Prepaid Insurance		6,700		5,100
	Equipment		185,000		185,000
	Accumulated Depreciation—Equipment			$58,000		$69,700
	Accounts Payable			11,000		11,000
	Interest Payable					300
	Salaries and Wages Payable			-		2,600
	Notes Payable			10,000		10,000
	Unearned Service Revenue			12,000		9,200
	Common Stock			20,000		20,000
	Retained Earnings			65,575		65,575
	Service Revenue			117,200		127,800
	Salaries and Wages Expense		16,000		18,600
	Insurance Expense				1,600
	Interest Expense		700		1,000
	Depreciation Expense				11,700
	Bad Debt Expense				1,555
	Supplies Expense				10,700
	Rent Expense		8,000		8,000
			$293,900	$293,900	$317,855	$317,855
Instructions
(a)	Journalize the annual adjusting entries that were made. (Omit explanations.) The first
	entry has been prepared for you.
Dec					Debit	Credit
31	Accounts Receivable				7,800
		Service Revenue				7,800
31
31
31
31
31
31
31
						-
(b)	Prepare an income statement and a statement of retained earnings for the year ending December 31, 2017, and an unclassified balance sheet at December 31.
	All expenses and liabilities should be placed in descending size order.
	HW Co.
	Income Statement
	For the Year Ended December 31, 2017
	Revenues
	Expenses
	HW Co.
	Statement of Retained Earnings
	For the Year Ended December 31, 2017
	HW Co.
	Balance Sheet
	December 31, 2017
	Assets
	Liabilities and Stockholders’ Equity

Answer 1

Jounral:

Account	Debit	Credit
Supplies expense	10,700
Supplies		10,700
Insurance expense	1,600
Prepaid insurance		1,600
Depreciation Expense	11,700
Accumulated Depreciation—Equipment		11,700
Salaries and Wages Expense	2,600
Salaries and Wages Payable		2,600
Interest Expense	300
Interest Payable		300
Bad Debt Expense	1,555
Allowance for Doubtful Accounts		1,555
Accounts Receivable	7,800
Unearned service revenue	2,800
Service revenue		10,600

Income statement:

Revenues
Service revenue		127800
Expenses
Salaries and Wages Expense		18600
Insurance Expense		1600
Interest Expense		1000
Depreciation Expense		11700
Bad Debt Expense		1555
Supplies Expense		10700
Rent Expense		8000
Net income		74645
Statement of retained earnings
Beginning balance		65575
Add net income		74645
Closing balance		140220

Balance sheet
Dec 31, 2017
Assets
Cash		16,000
Accounts Receivable	51,800
Allowance for Doubtful Accounts	1,680
Net Accounts receivable		50,120
Supplies		6,800
Prepaid Insurance		5,100
Equipment	1,85,000
Accumulated Depreciation—Equipment	69,700	1,15,300
Total assets		1,93,320
Liabilities and stockholder's equity
Accounts Payable		11,000
Interest Payable		300
Salaries and Wages Payable		2,600
Notes Payable		10,000
Unearned Service Revenue		9,200
Common Stock		20,000
Retained Earnings		1,40,220
Total liabilities and stockholder's equity		1,93,320