Question

Part 2: 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 $61,900, 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

Answer 1

	Adjusting Entries
	Particulars				Debit	Credit
1)	Supplies Expense				$ 2,800.00
	To Supplies					$ 2,800.00
	($ 8500 - $ 5700)
2)	Wages Expense				$ 3,500.00
	To Wages Payable					$ 3,500.00
3)	Insurance Expense				$ 8,600.00
	To Prepaid Insurace					$ 8,600.00
4)	Rent Expense				$ 2,250.00
	To Rent Payable					$ 2,250.00
5)	Depreciation Expense				$ 8,000.00
	To Accumulated Depreciation					$ 8,000.00
6)	Interest Expense				$    450.00
	To Interest Payable					$    450.00
7)	Property Tax Expense				$    625.00
	To Property Tax Payable					$    625.00
8)	Utilities Expense				$    425.00
	To Utilities Payable					$    425.00

			Unadjusted			Adjustments			Adjusted
			Debit	Credit		Debit	Credit		Debit	Credit
Cash			$   15,000.00			$      175.00			$   15,175.00
Supplies			$     8,500.00				$   2,800.00		$     5,700.00
Prepaid Insurance			$   11,200.00				$   8,600.00		$     2,600.00
Equipment			$ 175,000.00						$ 175,000.00
Accumulated Depreciation				$   19,000.00			$   8,000.00			$   27,000.00
Accounts Payable				$     9,250.00						$     9,250.00
Utilities Payable							$      425.00			$        425.00
Property Tax Payabe							$      625.00			$        625.00
Rent Payable							$   2,250.00			$     2,250.00
Interest Payable							$      450.00			$        450.00
Wages Payable							$   3,500.00			$     3,500.00
Dividends Payable							$      175.00			$        175.00
Long term notes Payable				$   45,000.00						$   45,000.00
Stockholder's Equity				$ 106,900.00						$ 106,900.00
Dividends			$   15,750.00						$   15,750.00
Demolition fees earned				$ 153,000.00						$ 153,000.00
Wage Expense			$   61,800.00			$   3,500.00			$   65,300.00
Interest Expense			$     6,250.00			$      450.00			$     6,700.00
Rent Expense			$   15,750.00			$   2,250.00			$   18,000.00
Property Tax Expense			$   12,500.00			$      625.00			$   13,125.00
Depreciation						$   8,000.00			$     8,000.00
Repair Expense			$     6,100.00						$     6,100.00
Utilities Expense			$     5,300.00			$      425.00			$     5,725.00
Supplies Expense						$   2,800.00			$     2,800.00
Insurance Expense						$   8,600.00			$     8,600.00
	Total		$ 333,150.00	$ 333,150.00		$ 26,825.00	$ 26,825.00		$ 348,575.00	$ 348,575.00

	Income Statement
	Demolition Fees earned				$ 153,000.00
Less:	Expenses
	Wage Expense			$ 65,300.00
	Interest Expense			$   6,700.00
	Rent Expense			$ 18,000.00
	Property Tax Expense			$ 13,125.00
	Depreciation			$   8,000.00
	Repair Expense			$   6,100.00
	Utilities Expense			$   5,725.00
	Supplies Expense			$   2,800.00
	Insurance Expense			$   8,600.00	$ 134,350.00
		Net Income			$   18,650.00

	Statement of Stockholder's Equity
	Beginning Balance			$ 106,900.00
Add:	Net Income			$   18,650.00
Less:	Dividends			$ (15,750.00)
	Ending Balance			$ 109,800.00

Balance Sheet Current Assets $ 15,175.00 $ 5,700.00 $ Cash Supplies Prepaid Insurance 2,600.00 23,475.00 Property, Plant and Equip $175,000.00 $(27,000.00) $148,000.00 Equipment Accumulated Depreciation Less: Total Assets $171,475.00 Current Liabilities $ 9,250.00 $ $ $ 2,250.00 $ $3,500.00 $ Accounts Payable Utilities Payable 425.00 Property Tax Payabe Rent Payable Interest Payable 625.00 450.00 Wages Payable Dividends Payable 175.00 16,675.00 Long term notes payable 45,000.00 Stockholder's Equity $109,800.00 Total Liabilities and Equity $171,475.00