Question

The following unadjusted trial balance is for Groenke Construction Company as of year-end for the December 31, 20x7 fiscal year. The December 31, 20x6 credit balance of the stockholders’ equity account is $50,500, and the stockholders invested $45,000 cash in the company during 20x7.

1. Account Title Debit                     Credit

101         Cash                                                      $15,000

126         Supplies                                               $8,500

128         Pre-paid insurance                          $11,200

167         Equipment                                          $175,000

168         Accumulated depreciation – equipment                 $19,000

201         Accounts payable                                                               $9,250

251         Long-term notes payable                                               $45,000

301         Shareholders’ equity                                                      $106,900

302         Dividends                                            $15,750

401         Construction Revenue                                                   $153,000

623         Wage expense                                  $61,800

633         Interest expense                               $6,250

640         Rent expense                                    $15,750

683         Property tax expense                    $12,500

684         Repairs expense                                $6,100

690         Utilities expense                                $5,300

TOTALS                                                            $333,150                  $333,150

Instructions:

Use the template provided to:

1. Journalize the following adjusting entries as of fiscal year-end December 31, 20x7.
2. Post the adjusting entries to an unadjusted trial balance and prepare the adjusted trial balance.
3. Create financial statements, namely: i) the income statement, ii) statement of stockholders’ equity, and iii) the balance sheet for 20x7.

Adjustments needed:

1. The supplies available at the end of the fiscal year 20x7 are at a cost of $5,700.
2. The company's employees have earned $3.500 in accrued wages for the fiscal year.
3. The cost of expired insurance for the fiscal year is $8,600.
4. The rent expense not yet paid or recorded in the fiscal year is $2,250.
5. Annual depreciation on equipment is $8,000; no other depreciation adjustment was made in 20x7.
6. The $450 accrued interest for December has not yet been paid and reported.
7. Additional property taxes of $625 have been assessed for the fiscal year but have not yet been paid or recorded in the accounts.
8. The December utilities expense of $425 is not included in the adjusted trial balance, because the bill arrived after the trial balance was prepared. The $425 amount owed needs to be recorded.

Groenke Construotion Co, Adjustments Deoember 31, 20x7 djusted Trial Bala Adjustments sted Trial Bala Debit $16,000 8,500 11,200 175,000 26 Supplas Prepaid inaurance Eqipmen [Company Name] Statement of Stookholders' Equity 20 Accouks payab 251 Longeim nobee payable $45000 0 Stockhokers'equ Stocknoldars Equky, [dat] Pus: Aditional shateholde investmenm Net incoT $15,750 0 Demoltion fees eamed Wage espense Nor incomshalishareh $61.800 16,350 $15,750 $12.500 Less: Dividends Stockholdes Equty. [date] Propety tas eapense 0Utities espense 45,300 [Company Name] Balanae Sheet [Datel Liabilities& Stockholders Equit

Answer 1

Requirements as asked:

--Trial Balances

	Unadjusted		Adjustments		Adjusted
	Debit	Credit	Debit	Credit	Debit	Credit
Cash	$                15,000				$              15,000
Supplies	$                   8,500			$                 2,800	$                5,700
Pre-paid insurance	$                11,200			$                 8,600	$                2,600
Equipment	$              175,000				$            175,000
Accumulated depreciation – equipment		$               19,000		$                 8,000		$                     27,000
Accounts payable		$                 9,250				$                        9,250
Rent payable				$                 2,250		$                        2,250
Wages payable				$                 3,500		$                        3,500
Interest Payable				$                     450		$                           450
Property Taxes Payable				$                     625		$                           625
Utilities Payable				$                     425		$                           425
Long-term notes payable		$               45,000				$                     45,000
Shareholders’ equity		$             106,900				$                   106,900
Dividends	$                15,750				$              15,750
Construction Revenue		$             153,000				$                   153,000
Wage expense	$                61,800		$                 3,500		$              65,300
Interest expense	$                   6,250		$                     450		$                6,700
Rent expense	$                15,750		$                 2,250		$              18,000
Property tax expense	$                12,500		$                     625		$              13,125
Repairs expense	$                   6,100				$                6,100
Utilities expense	$                   5,300		$                     425		$                5,725
Supplies expense			$                 2,800		$                2,800
Insurance expense			$                 8,600		$                8,600
Depreciation expense - equipment			$                 8,000		$                8,000
TOTALS	$              333,150	$             333,150	$               26,650	$               26,650	$            348,400	$                   348,400

--Statement of SHE

Groenke Construction Company
Statement of Stockholder's Equity
for the year ending Dec 31, 20X7
Stockholder's Equity 1 Jan 20X7		$           61,900
Plus: Additional Investments	$            45,000
Net Income	$            18,650
		$           63,650
Less: Dividends		$           15,750
Stockholder's Equity 31 Dec 20X7		$         109,800

--Balance sheet

Groenke Construction Company
Balance Sheet
as at 31 Dec 20X7
ASSETS		LIABILITIES & STOCKHOLDER's EQUITY
Current Assets:		Current Liabilities:
Cash	$            15,000	Accounts payable	$                  9,250
Supplies	$               5,700	Rent payable	$                  2,250
Pre-paid insurance	$               2,600	Wages payable	$                  3,500
		Interest Payable	$                      450
		Property Taxes Payable	$                      625
		Utilities Payable	$                      425
Total Current Assets	$            23,300	Total Current Liabilities	$                16,500
Long Term Assets:		Long-term notes payable	$                45,000
Equipment	$          175,000	Total Liabilities	$                61,500
Accumulated depreciation – equipment	$          (27,000)
Total LTA	$          148,000	Stockholder's Equity	$             109,800
Total Assets	$          171,300	Total Liabilities & Stockholder's Equity	$             171,300