Question

The following unadjusted trial balance is for Ace Construction Co. as of the end of its 2019 fiscal year. The June 30, 2018, credit balance of the owner's capital account was $57,700, and the owner invested $29,000 cash in the company during the 2019 fiscal year. Credit $ 29,000 6,600 ACE CONSTRUCTION CO. Unadjusted Trial Balance June 30, 2019 NO. Account Title Debit 101 Cash $ 17,000 126 Supplies 9,500 128 Prepaid insurance 5,500 167 Equipment 163,520 168 Accumulated depreciation-Equipment 201 Accounts payable 203 Interest payable 208 Rent payable 210 Wages payable 213 Property taxes payable 251 Long-term notes payable 301 V. Ace, Capital 302 V. Ace, Withdrawals 29,000 401 Construction fees earned 612 Depreciation expense-Equipment 623 Wages expense 45,000 633 Interest expense 3,080 637 Insurance expense 0 640 Rent expense 15,000 652 Supplies expense 683 Property taxes expense 4,900 684 Repairs expense 2,300 690 Utilities expense 3,500 Totals $298,300 28,000 86,700 148,000 $ 298,300 Adjustments: a. The supplies available at the end of fiscal year 2019 had a cost of $3,420. b. The cost of expired insurance for the fiscal year is $3,465. c. Annual depreciation on equipment is $8,400. d. The June utilities expense of $570 is not included in the unadjusted trial balance because the bill arrived after the trial balance was prepared. The $570 amount owed needs to be recorded. e. The company's employees have earned $1,100 of accrued and unpaid wages at fiscal year-end. f. The rent expense incurred and not yet paid or recorded at fiscal year-end is $400. g. Additional property taxes of $800 have been assessed for this fiscal year but have not been paid or recorded in the accounts. h. The $280 accrued interest for June on the long-term notes payable has not yet been paid or recorded. Required: 1. Prepare a 10-column work sheet for fiscal year 2019, starting with the unadjusted trial balance and including adjustments based on the additional facts. The June 30, 2018, credit balance of the owner's capital account was $57,700, and the owner invested $29,000 cash in the company during the 2019 fiscal year. 2a. Prepare the adjusting entries. (all dated June 30, 2019). 2b. Prepare the closing entries. (all dated June 30, 2019): 3a. Prepare the income statement for the year ended June 30, 2019. 3b. Prepare the statement of owner's equity for the year ended June 30, 2019. 3c. Prepare the classified balance sheet at June 30, 2019.

Answer 1

Req 1.

Prepare Worksheet as follows:

Ace Construction Co.
Worksheet
For the year Ended June 30,2019
	Unadjusted Trial balannce		Adjustments		Adjusted Trial balannce		Income Statement		Balance Sheet & Statement of Owner's Equity
	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	$17,000				$17,000				$17,000
Supplies	$9,500			$6,080	$3,420				$3,420
Prepaid insurance	$5,500			$3,465	$2,035				$2,035
Equipment	$163,520				$163,520				$163,520
Accum. Deprn.- Equipment		$29,000		$8,400		$37,400				$37,400
Accounts payable		$6,600		$570		$7,170				$7,170
Interest payable		-		$280		$280				$280
Rent payable		-		$400		$400				$400
Wages payable		-		$1,100		$1,100				$1,100
Property tax payable		-		$800		$800				$800
Long term note payable		$28,000				$28,000				$28,000
V ace, capital		$86,700				$86,700				$57,700
V ace, Drawing	$29,000				$29,000
Contruction fees earned		$148,000				$148,000		$148,000
Depr. Expense- Eqipment	-		$8,400		$8,400		$8,400
Wages expense	$45,000		$1,100		$46,100		$46,100
Interest expense	$3,080		$280		$3,360		$3,360
Insurance expense	-		$3,465		$3,465		$3,465
Rent expense	$15,000		$400		$15,400		$15,400
Supplies expense	-		$6,080		$6,080		$6,080
Property tax expense	$4,900		$800		$5,700		$5,700
Repair expense	$2,300				$2,300		$2,300
Utilities expense	$3,500		$570		$4,070		$4,070
	$298,300	$298,300	$21,095	$21,095	$309,850	$309,850	$94,875	$148,000	$185,975	$132,850
Net Income							$53,125			$53,125
Total							$148,000	$148,000	$185,975	$185,975

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Req. 2A

Trn. No	Account Titles	Debit	Credit
a	Supplies expense	$6,080
	Supplies		$6,080
b	Insurance expense	$3,465
	Prepaid insurance		$3,465
c	Depreciation Expense	$8,400
	Accumulated Depreciation Expense		$8,400
d	Utilities expense	$570
	Accounts payable		$570
e	Wage expense	$1,100
	Wage payable		$1,100
f	Rent expense	$400
	Rent payable		$400
g	Property tax expense	$800
	Property tax payable		$800
h	Interest expense	$280
	Interest payable		$280

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Req. 2B

Trn. No	Account Titles	Debit	Credit
Jun. 30, 2019	Contruction fees earned	$148,000
	Income Summary		$148,000
Jun. 30, 2019	Income Summary	$94,875
	Depr. Expense- Eqipment		$8,400
	Wages expense		$46,100
	Interest expense		$3,360
	Insurance expense		$3,465
	Rent expense		$15,400
	Supplies expense		$6,080
	Property tax expense		$5,700
	Repair expense		$2,300
	Utilities expense		$4,070
Jun. 30, 2019	Income Summary ($148,000 - $94,875)	$53,125
	V Ace, capital		$53,125
Jun. 30, 2019	V Ace, capital	$29,000
	V Ace, withdrawals		$29,000

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Req. 3A

Prepare income statement as follows:

Income Statement
Revenue:
Contruction fees earned		$148,000
Less: operating expense:
Depr. Expense- Eqipment	$8,400
Wages expense	$46,100
Interest expense	$3,360
Insurance expense	$3,465
Rent expense	$15,400
Supplies expense	$6,080
Property tax expense	$5,700
Repair expense	$2,300
Utilities expense	$4,070	$94,875
Net Income		$53,125

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Req. 3B

Statement of owner's equity
Unadjusted balance	$57,700
Add: Net Income	$53,125
Add: Investment	$29,000
Less: Withdrawals	($29,000)
Ending balance	$110,825

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Req 3C

Balance Sheet
Assets:
Current Assets:
Cash	$17,000
Supplies	$3,420
Prepaid insurance	$2,035	$22,455
Property, Plant and Equipment
Equipment	$163,520
Less: Accumulated Deprn.	($37,400)	$126,120
Total Assets		$148,575
Liabilities:
Current liabilities:
Accounts payable	$7,170
Interest payable	$280
Rent payable	$400
Wages payable	$1,100
Property tax payable	$800	$9,750
Long Note payable		$28,000
Total Liabilities		$37,750
Owners equity		$110,825
Total Liabilities & Owners' Equity		$148,575