Question

PROBLEM 1 (25pts) Update the trial balance for Kreg's Moving Co. October 31, 201X. Adjustment Data to Update Trial Balance a. Insurance expired, $550. b. Moving supplies on hand, $800. c. Depreciation on moving truck, $550. d. Wages earned but unpaid, $300. Your task is to: 1. Complete a worksheet for Kreg's Moving Co. for the month of October. 2. Prepare an income statement for October, a statement of owner's equity for October, and a balance sheet as of October 31, 201X.

Answer 1

1]		Unadjusted Trial Balance		Adjustments		Adjusted Trial Balance		Income Statement		Balance Sheet
		Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
	Cash	$     6,00,000				$        6,00,000				$      6,00,000
	Prepaid insurance	$     2,40,000			$               550	$        2,39,450				$      2,39,450
	Moving supplies	$     1,00,000			$         99,200	$                 800				$               800
	Moving truck	$   18,00,000				$     18,00,000				$   18,00,000
	Accumulated depreciation, Moving truck		$       6,00,000		$               550		$    6,00,550				$   6,00,550
	Accounts payable		$       2,76,800				$    2,76,800				$   2,76,800
	Wages payable				$               300		$              300				$            300
	K.Hill, Capital		$     16,39,300				$ 16,39,300				$17,62,600
	K.Hill, Withdrawals	$     1,50,000				$        1,50,000
	Revenue from moving		$       8,80,000				$    8,80,000		$    8,80,000
	Wages expense	$     3,71,200		$                300		$        3,71,500		$    3,71,500
	Rent expense	$         72,000				$           72,000		$        72,000
	Advertising expense	$         62,900				$           62,900		$        62,900
	Insurance expense			$                550		$                 550		$              550
	Moving supplies expense			$          99,200		$           99,200		$        99,200
	Depreciation expense-Moving truck			$                550		$                 550		$              550
								$    6,06,700	$    8,80,000
	Net income							$    2,73,300
	Total	$   33,96,100	$     33,96,100	$      1,00,600	$     1,00,600	$     33,96,950	$ 33,96,950	$    8,80,000	$    8,80,000	$   26,40,250	$26,40,250
2]	INCOME STATEMENT
	Revenue from moving		$       8,80,000
	Expenses:
	Wages expense	$     3,71,500
	Rent expense	$         72,000
	Advertising expense	$         62,900
	Insurance expense	$               550
	Moving supplies expense	$         99,200
	Depreciation expense-Moving truck	$               550
	Total expenses		$       6,06,700
	Net income		$       2,73,300
	STATEMENT OF OWNERS' EQUITY
	Balance, October 1, 20IX		$     16,39,300
	Add: Net income for October	$     2,73,300
	Less: Withdrawals	$     1,50,000
	Net addition during the month		$       1,23,300
	Balance, October 31, 20IX		$     17,62,600
	BALANCE SHEET
	Assets
	Current assets:
	Cash	$     6,00,000
	Prepaid insurance	$     2,39,450
	Moving supplies	$               800
	Total current assets		$       8,40,250
	Non current assets:
	Moving truck	$   18,00,000
	Accumulated depreciation	$     6,00,550
	Total non current assets		$     11,99,450
	Total assets		$     20,39,700
	Total liabilities & Owners' equity
	Current liabilities:
	Accounts payables	$     2,76,800
	Wages payable	$               300
	Total current liabilities		$       2,77,100
	Owner's equity		$     17,62,600
	Total liabilities & Owners' equity		$     20,39,700