Question

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.

Answer 1

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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