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 $51,200, and the owner invested $22,000 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 | $ | 16,500 | |||||
| 126 | Supplies | 10,000 | ||||||
| 128 | Prepaid insurance | 5,000 | ||||||
| 167 | Equipment | 146,510 | ||||||
| 168 | Accumulated depreciation—Equipment | $ | 26,500 | |||||
| 201 | Accounts payable | 5,400 | ||||||
| 203 | Interest payable | 0 | ||||||
| 208 | Rent payable | 0 | ||||||
| 210 | Wages payable | 0 | ||||||
| 213 | Property taxes payable | 0 | ||||||
| 251 | Long-term notes payable | 29,000 | ||||||
| 301 | V. Ace, Capital | 73,200 | ||||||
| 302 | V. Ace, Withdrawals | 29,000 | ||||||
| 401 | Construction fees earned | 148,000 | ||||||
| 612 | Depreciation expense—Equipment | 0 | ||||||
| 623 | Wages expense | 48,000 | ||||||
| 633 | Interest expense | 3,190 | ||||||
| 637 | Insurance expense | 0 | ||||||
| 640 | Rent expense | 14,000 | ||||||
| 652 | Supplies expense | 0 | ||||||
| 683 | Property taxes expense | 4,500 | ||||||
| 684 | Repairs expense | 2,100 | ||||||
| 690 | Utilities expense | 3,300 | ||||||
| Totals | $ | 282,100 | $ | 282,100 | ||||
Adjustments:
- The supplies available at the end of fiscal year 2019 had a cost of $3,600.
- The cost of expired insurance for the fiscal year is $3,150.
- Annual depreciation on equipment is $8,600.
- The June utilities expense of $590 is not included in the unadjusted trial balance because the bill arrived after the trial balance was prepared. The $590 amount owed needs to be recorded.
- The company’s employees have earned $1,800 of accrued and unpaid wages at fiscal year-end.
- The rent expense incurred and not yet paid or recorded at fiscal year-end is $400.
- Additional property taxes of $900 have been assessed for this fiscal year but have not been paid or recorded in the accounts.
- The $290 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 $51,200, and the
owner invested $22,000 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
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| Adjusting Entries | ||
| Account | Debit $ | Credit $ |
| Officer Supplies Expense | 6,400.00 | |
| Office Supplies | 6,400.00 | |
| Insurance Expense | 3,150.00 | |
| Prepaid Insurance | 3,150.00 | |
| Depreciation Expense- Equipment | 8,600.00 | |
| Accumulated Depreciation-Equipment | 8,600.00 | |
| Utilities Expense | 590.00 | |
| Accounts Payable | 590.00 | |
| Wages Expense | 1,800.00 | |
| Wages Payable | 1,800.00 | |
| Rent Expense | 400.00 | |
| Rent Payable | 400.00 | |
| Property taxes | 900.00 | |
| Property Taxes Payable | 900.00 | |
| Interest Expense | 290.00 | |
| Interest Payable | 290.00 | |
| Closing Entries | ||
| Account | Debit $ | Credit $ |
| Construction Fees Earned | 148,000.00 | |
| Income Summary | 148,000.00 | |
| Income Summary | 97,220.00 | |
| Depreciation Expense | 8,600.00 | |
| Wages Expense | 49,800.00 | |
| Interest Expense | 3,480.00 | |
| Insurance Expense | 3,150.00 | |
| Rent Expense | 14,400.00 | |
| Supplies Expense | 6,400.00 | |
| Property Taxes Expense | 5,400.00 | |
| Repairs expense | 2,100.00 | |
| Utilities Expense | 3,890.00 | |
| Income Summary | 50,780.00 | |
| V. Ace Capital | 50,780.00 | |
| V. Ace Capital | 29,000.00 | |
| V. Ace Withdrawals | 29,000.00 | |
| Income Statement | Amount $ |
| Construction Fees Earned | 148,000.00 |
| Less: | |
| Depreciation Expense | 8,600.00 |
| Wages Expense | 49,800.00 |
| Interest Expense | 3,480.00 |
| Insurance Expense | 3,150.00 |
| Rent Expense | 14,400.00 |
| Supplies Expense | 6,400.00 |
| Property Taxes Expense | 5,400.00 |
| Repairs expense | 2,100.00 |
| Utilities Expense | 3,890.00 |
| Net Income | 50,780.00 |
| Statement of Owners Equity | Amount $ |
| V. Ace Capital- 30 June 2018 | 51,200.00 |
| Add: Additional Capital | 22,000.00 |
| Add: Net Income | 50,780.00 |
| Less: V. Ace Withdrawals | 29,000.00 |
| V. Ace Capital- 30 June 2019 | 94,980.00 |
| Balance Sheet | Amount $ | Amount $ |
| Current Assets | ||
| Cash | 16,500.00 | |
| Supplies | 3,600.00 | |
| Prepaid Insurance | 1,850.00 | |
| Total Current Assets | 21,950.00 | |
| Non Current Assets | ||
| Equipment | 146,510.00 | |
| Less: Accumulated Depreciation | 35,100.00 | |
| Fixed Assets | 111,410.00 | |
| Total Assets | 133,360.00 | |
| Liabilities & Owner's Equity | ||
| Liabilities | Amount $ | Amount $ |
| Current Liabilities | ||
| Accounts Payable | 5,990.00 | |
| Interest Payable | 290.00 | |
| Rent Payable | 400.00 | |
| Wages Payable | 1,800.00 | |
| Property Taxes Payable | 900.00 | |
| Current portion of Long term Loans | ||
| Current Liabilities | 9,380.00 | |
| Non- Current Liabilities | ||
| Long term Loans Payable | 29,000.00 | |
| Non- Current Liabilities | 29,000.00 | |
| Total Liabilities | 38,380.00 | |
| Owner's Equity | ||
| V. Ace Capital- 30 June 2019 | 94,980.00 | |
| Owner's Equity | 94,980.00 | |
| Total Liabilities & Owner's Equity | 133,360.00 |
ekkarill92 answered 1 year ago