Question

In: Accounting

The following unadjusted trial balance is for Ace Construction Co. as of the end of its...

The following unadjusted trial balance is for Ace Construction Co. as of the end of its 2019 fiscal year. The June 30, 2018, credit balance of the owner’s capital account was $52,500, and the owner invested $20,000 cash in the company during the 2019 fiscal year.

ACE CONSTRUCTION CO.
Unadjusted Trial Balance
June 30, 2019
No. Account Title Debit Credit
101 Cash $ 18,500
126 Supplies 9,000
128 Prepaid insurance 5,500
167 Equipment 130,970
168 Accumulated depreciation—Equipment $ 20,000
201 Accounts payable 6,200
203 Interest payable 0
208 Rent payable 0
210 Wages payable 0
213 Property taxes payable 0
251 Long-term notes payable 23,000
301 V. Ace, Capital 72,500
302 V. Ace, Withdrawals 28,500
401 Construction fees earned 138,000
612 Depreciation expense—Equipment 0
623 Wages expense 42,000
633 Interest expense 2,530
637 Insurance expense 0
640 Rent expense 12,000
652 Supplies expense 0
683 Property taxes expense 4,800
684 Repairs expense 2,200
690 Utilities expense 3,700
Totals $ 259,700 $ 259,700


Adjustments:

  1. The supplies available at the end of fiscal year 2019 had a cost of $3,240.
  2. The cost of expired insurance for the fiscal year is $3,465.
  3. Annual depreciation on equipment is $8,500.
  4. The June utilities expense of $520 is not included in the unadjusted trial balance because the bill arrived after the trial balance was prepared. The $520 amount owed needs to be recorded.
  5. The company’s employees have earned $1,700 of accrued and unpaid wages at fiscal year-end.
  6. The rent expense incurred and not yet paid or recorded at fiscal year-end is $500.
  7. Additional property taxes of $700 have been assessed for this fiscal year but have not been paid or recorded in the accounts.
  8. The $230 accrued interest for June on the long-term notes payable has not yet been paid or recorded.

Required:
1.
Prepare a 10-column work sheet for fiscal year 2019, starting with the unadjusted trial balance and including adjustments based on the additional facts. The June 30, 2018, credit balance of the owner’s capital account was $52,500, and the owner invested $20,000 cash in the company during the 2019 fiscal year.
2a. Prepare the adjusting entries. (all dated June 30, 2019).
2b. Prepare the closing entries. (all dated June 30, 2019):
3a. Prepare the income statement for the year ended June 30, 2019.
3b. Prepare the statement of owner's equity for the year ended June 30, 2019.
3c. Prepare the classified balance sheet at June 30, 2019.

Solutions

Expert Solution

1. Work Sheet -

2. Adjusting Entries -

3. Income Statement -

4. Statement of Owner's Equity -

5. Balance Sheet -

6. Closing Entries -

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