Question

Green Valley Company prepared the following trial balance at the end of its first year of operations ending December 31. To simplify the case, the amounts given are in thousands of dollars.

	UNADJUSTED
Account Titles	Debit		Credit
Cash	25
Accounts receivable	22
Prepaid insurance	17
Machinery	84
Accumulated depreciation
Accounts payable			18
Wages payable
Income taxes payable
Common stock (3,000 shares)			3
Additional paid-in capital			64
Retained earnings	16
Revenues (not detailed)			111
Expenses (not detailed)	32
Totals	196		196

Other data not yet recorded at December 31 include

1. Insurance expired during the current year, $13.
2. Wages payable, $16.
3. Depreciation expense for the current year, $18.
4. Income tax expense, $10.

Required:

1. Prepare the adjusting entries for the current year.

2. Complete the trial balance Adjustments and Adjusted columns. The “Ref.” column is for the reference letter of the adjusting entry effect.

Complete the trial balance Adjustments and Adjusted columns. The “Ref.” column is for the reference letter of the adjusting entry effect. (For revenues and expenses enter the total amount of adjustments in the adjusted column. Enter your answers in thousands.)

GREEN VALLEY COMPANY Trial Balance December 31, Current Year Unadjusted Adjustments Adjusted Account Titles Debit Credit Ref. Debit Credit Debit Credit Cash 25 Accounts receivable 22 Prepaid insurance 17 Machinery 84 Accumulated depreciation Accounts payable 18 Wages payable Income taxes payable Common stock 3 Additional paid-in capital 64 Retained earnings 16 Revenues (not detailed) 111 Expenses (not detailed) 32 Totals 196 196 0 0 0 0

Answer 1

Credit Debit $ 13 Date General journal Dec.31 Insurance Expense Prepaid Insurance (To record insurance Expense) S 13 S 16 Dec.31 Wages expense Wages Payable (To record wage expense) $ 16 S 18 Dec.31 Depreciation Expense Accumulated depreciation (To record depreciation expense) $ 18 $ 10 Dec.31 Income Tax Expense Income Tax Payable (To record income tax expense) S 10

Account Titles Cash Accounts receivable Prepaid insurance Machinery Accumulated depreciation Accounts payable Wages payable Income taxes payable Common stock (3,000 shares) Additional paid-in capital Retained earnings Revenues not detailed) Expenses (not detailed) Totals GREEN VALLEY COMPANY Trial Balance December 31, Current Year Unadjusted Adjustments Adjusted Debit Credit Ref. Debit Credit Debit Credit $ 25 $ 25 $ 22 $ 22 $ 17 S 13 S 4 $ 84 $ 84 S 18 S 18 $ 18 $ 18 $ 16 $ 16 $ 10 $ 10 $ 3 $ 3 S 64 $ 64 $ 16 $ 16 $ 111 S 111 $ 32 $ 57 $ 89 S 1965 196 $ 57 $ 57 $ 240 240