Question

The unadjusted trial balance of Big Construction company on December 31, 2020, contained the attached accounts at the end of the company's calendar year. Inventory taken on 12/31/2020 was $42,000 Depreciation on equipment was $9,000 Unpaid accrued salaries were $2,800 Unexpired rent amounted to $2,500 Supplies on hand were $1,800 Accrued Sales revenue on 12/31/2020 was $3,400 Expired Insurance amounted to $2,000 Interest on the company's notes receivable at year-end amounted to $400 Unearned rent revenue earned at year-end amounted to $4,500 3 4 6 7 Instructions: Journalize the above adjusting entries Complete the worksheet using the above year-end information. Prepare a multiple-step income statement fior Big Construction Company as of December 31, 2020. Prepare an owner's equity statement for Big Construction Company as of December 31 2020. Prepaire a classified balance sheet for Big Construction Company as of December 31, 2020. Journalize the closing entries.

Answer 1

Big Construction Company Adjusting Enteries Debit in $ Credit in $ Trans. Particulars Depreciation Expense a/c 2 Dr. 9000 To Accum. Depre - Equip 9000 To record depreciation) Salaries and Wages Expense a/c Dr. To Salaries and Wages Payable 2800 2800 (Salaries accrued) Rent Expense a/c Dr.. 5900 To Prepaid Rent 5900 (Rent expensed) 8400 2500 Supplies Expense a/c To Supplies 1100 5 Dr. 1100 (Supplies expensed) 2900 1800 Accounts Receivable a/c 3400 6 Dr. To Sales Revenue 3400 (Sales on account) Insurance Expense a/c 7 Dr. 2300 To Prepaid Insurance 2300 (Insurance expensed) 4300 - 2000 Interest Receivable a/c 8 Dr. 400 To Interest Revenue 400 (Interest accrrued) Unearned Rent Revenue a/c Dr. 8000 To Rent Revenue 8000 (Revenue earned)

Closing Enteries Debit in $ Credit in $ Particulars Date 31.12.2020 Income Summary a/c Dr. 128000 To Sales Returns and Allowances 2100 To Sales Discount 1900 To Cost of goods sold 57000 To Rent Expense 26900 To Salaries and Wages Expense 20800 To Utilities Expense 2800 To Advertising Expense 1900 To Depreciation Expense 9000 To Supplies Expense 1100 To Insurance Expense 2300 To Interest Expense 2200 (Expense accounts closed) 31.12.2020 Sales Revenue a/c 282400 Dr. Interest Revenue a/c Rent Revenue a/c Dr. 15400 Dr. 10700 To Income Summary 308500 (Revenue accounts closed) 31.12.2020 Income Summary a/c Dr. 180500 To Owner's Capital 180500 (Profits transferred) 31.12.2020 Owner's Capital a/c Dr. 4700 To Owner's Drawing 4700 (Drawings charged)

Worksheet For the period ending 31.12.2020 Unadjusted Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in$ Debit in $ Credit in $ Adjustments Adjusted Balance sheet Income Statement Particulars Cash 220000 220000 220000 Notes Receivable 24000 24000 24000 Interest Receivable 400 400 400 Accounts Receivable 23000 26400 26400 3400 42000 Inventory 47000 5000 42000 Prepaid Insurance 4300 2000 2300 2000 Prepaid Rent 8400 5900 2500 2500 Supplies 90 1800 1800 Land 28000 28000 28000 90000 Equipment 90000 90000 Accum. Depre Equip 9000 18000 27000 27000 Accounts Payable 28000 28000 28000 Unearned Rent Revenue 12500 8000 4500 4500 Salaries and Wages Payable 2800 2800 2800 Mortgage Payable 75000 75000 75000 Owner's Capital 124000 124000 299800 Owner's Drawing 4700 4700 Income Summary 5000 5000 5000 Sales Revenue 279000 3400 282400 282400 Sales Returns and Allowances 2100 2100 2100 Sales Discount 1900 1900 1900 Purchases 51000 51000 51000 Purchases and Allowances 800 800 800 Purchases discount 1200 1200 1200 Freight in 3000 3000 3000 Rent Expense 5900 26900 26900 21000 Salaries and Wages Expense 18000 2800 20800 20800 Utilities Expense 2800 2800 2800 Advertising Expense 1900 1900 1900 Interest Expense 2200 2200 2200 Interest Revenue 15000 400 15400 15400 Rent Revenue 2700 8000 10700 10700 Totals 556200 556200 Depreciation Expense 9000 9000 9000 Supplies Expense 1100 1100 1100 Insurance Expense 2300 2300 2300 Totals 37900 37900 571800 571800 130000 310500 437100 437100 Net Income 180500 0

Statement of Income For the period ending 31.12.2020 Sales Revenue 282400 Sales Returns and Allowances -2100 Sales Discount -1900 278400 Net Sales Cost of goods sold: Beginning Inventory 47000 Purchases 51000 Purchases and Allowances -800 Purchases discount -1200 Freight in 99000 Ending Inventory -42000 57000 Rent Expense Salaries and Wages Expense 26900 20800 Utilities Expense 2800 Advertising Expense 1900 Depreciation Expense 9000 Supplies Expense 1100 64800 Insurance Expense 2300 Operating Income 156600 Non Operating Items: Interest Revenue 15400 Rent Revenue 10700 Interest Expense -2200 23900 Net Income 180500 Statement of Owner's Equity For the period ending 31.12.2020 Beginning Balance 124000 Net Income 180500 304500 Owner's Drawing -4700 299800

Balance sheet As at 31.12.2020 Amounts in $ Amounts in $ Liabilities Amounts in $ Amounts in $ Assets Current Liabilities Current Assets Accounts Payable Cash 220000 28000 Notes Receivable Unearned Rent Revenue 24000 4500 Salaries and Wages Payable Interest Receivable 35300 400 2800 Accounts Receivable 26400 Non Current Liabilities Inventory 42000 Prepaid Insurance 2000 Mortgage Payable 75000 Prepaid Rent 2500 Supplies 1800 19100 Non Current Assets Land 28000 Owner's Equity 63000 Owner's Capital 90000 Equipment Accum. Depre - Equip 299800 -27000 410100 Total Liabilities & equity Total Assets 410100