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 $56,500, and the owner invested $23,000 cash in the company during the 2019 fiscal year.
ACE CONSTRUCTION CO.
Unadjusted Trial Balance
June 30, 2019No.Account TitleDebit Credit101Cash$17,000 126Supplies
9,500 128Prepaid insurance 6,000 167Equipment 145,530
168Accumulated depreciation—Equipment $ 24,000 201Accounts payable
6,600 203Interest payable 0 208Rent payable 0 210Wages payable 0
213Property taxes payable 0 251Long-term notes payable 27,000 301V.
Ace, Capital 79,500 302V. Ace, Withdrawals 29,500 401Construction
fees earned 144,000 612Depreciation expense—Equipment 0 623Wages
expense 48,000 633Interest expense 2,970 637Insurance expense 0
640Rent expense 12,000 652Supplies expense 0 683Property taxes
expense 4,700 684Repairs expense 2,900 690Utilities expense 3,000
Totals$281,100 $281,100
Adjustments:
The supplies available at the end of fiscal year 2019 had a cost of $3,420.The cost of expired insurance for the fiscal year is $3,780.Annual depreciation on equipment is $8,500.The June utilities expense of $560 is not included in the unadjusted trial balance because the bill arrived after the trial balance was prepared. The $560 amount owed needs to be recorded.The company’s employees have earned $1,300 of accrued and unpaid wages at fiscal year-end.The rent expense incurred and not yet paid or recorded at fiscal year-end is $400.Additional property taxes of $900 have been assessed for this fiscal year but have not been paid or recorded in the accounts.The $270 accrued interest for June on the long-term notes payable has not yet been paid or recorded
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Ace Construction Co. | ||||||||||
Answer 1 | ||||||||||
Adjusted Trial Balance | Unadjusted | Adjustments | Adjusted | Income Statement | Balance Sheet | |||||
Account Titles | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | Asset | Liabilities |
Cash | 17,000.00 | 17,000.00 | 17,000.00 | |||||||
Supplies | 9,500.00 | 6,080.00 | 3,420.00 | 3,420.00 | ||||||
Prepaid Insurance | 6,000.00 | 3,780.00 | 2,220.00 | 2,220.00 | ||||||
Equipment | 145,530.00 | 145,530.00 | 145,530.00 | |||||||
Accumulated Depreciation- Equipment | 24,000.00 | 8,500.00 | 32,500.00 | (32,500.00) | ||||||
Accounts Payable | 6,600.00 | 560.00 | 7,160.00 | 7,160.00 | ||||||
Interest Payable | - | 270.00 | 270.00 | 270.00 | ||||||
Rent Payable | - | 400.00 | 400.00 | 400.00 | ||||||
Wages Payable | - | 1,300.00 | 1,300.00 | 1,300.00 | ||||||
Property taxes Payable | - | 900.00 | 900.00 | 900.00 | ||||||
Long-term notes payable | 27,000.00 | 27,000.00 | 27,000.00 | |||||||
Ace, Capital | 79,500.00 | 79,500.00 | 79,500.00 | |||||||
Ace, Withdrawals | 29,500.00 | 29,500.00 | (29,500.00) | |||||||
Construction fees earned | 144,000.00 | 144,000.00 | 144,000.00 | |||||||
Depreciation Expense- Equipment | 8,500.00 | 8,500.00 | 8,500.00 | |||||||
Wages Expense | 48,000.00 | 1,300.00 | 49,300.00 | 49,300.00 | ||||||
Interest Expense | 2,970.00 | 270.00 | 3,240.00 | 3,240.00 | ||||||
Insurance expense | 3,780.00 | 3,780.00 | 3,780.00 | |||||||
Rent Expense | 12,000.00 | 400.00 | 12,400.00 | 12,400.00 | ||||||
Supplies Expense | 6,080.00 | 6,080.00 | 6,080.00 | |||||||
Property taxes Expense | 4,700.00 | 900.00 | 5,600.00 | 5,600.00 | ||||||
Repairs expense | 2,900.00 | 2,900.00 | 2,900.00 | |||||||
Utilities Expense | 3,000.00 | 560.00 | 3,560.00 | 3,560.00 | ||||||
Sub Total | 281,100.00 | 281,100.00 | 21,790.00 | 21,790.00 | 293,030.00 | 293,030.00 | 95,360.00 | 144,000.00 | ||
Net Income | 48,640.00 | 48,640.00 | ||||||||
Total | 281,100.00 | 281,100.00 | 21,790.00 | 21,790.00 | 293,030.00 | 293,030.00 | 144,000.00 | 144,000.00 | 135,670.00 | 135,670.00 |
Answer 2a | Adjusting Entries | |
Account | Debit $ | Credit $ |
Office Supplies Expense | 6,080.00 | |
Office Supplies | 6,080.00 | |
Insurance Expense | 3,780.00 | |
Prepaid Insurance | 3,780.00 | |
Depreciation Expense | 8,500.00 | |
Accumulated Depreciation- Equipment | 8,500.00 | |
Utilities Expense | 560.00 | |
Accounts Payable | 560.00 | |
Wages Expense | 1,300.00 | |
Wages Payable | 1,300.00 | |
Rent Expense | 400.00 | |
Rent Payable | 400.00 | |
Property taxes Expense | 900.00 | |
Property taxes Payable | 900.00 | |
Interest Expense | 270.00 | |
Interest Payable | 270.00 | |
Answer 2b | Closing entries | |
In closing entries all income and expense are closed to Income Summary account. Then Income Summary account and owner drawings account is closed to Owner's capital account. | ||
Closing Entries | ||
Account | Debit $ | Credit $ |
Construction fees earned | 144,000.00 | |
Income Summary | 144,000.00 | |
Income Summary | 95,360.00 | |
Depreciation Expense- Equipment | 8,500.00 | |
Wages Expense | 49,300.00 | |
Interest Expense | 3,240.00 | |
Insurance expense | 3,780.00 | |
Rent Expense | 12,400.00 | |
Supplies Expense | 6,080.00 | |
Property taxes Expense | 5,600.00 | |
Repairs expense | 2,900.00 | |
Utilities Expense | 3,560.00 | |
Income Summary | 48,640.00 | |
Owner's Capital | 48,640.00 | |
Owner's Capital | 29,500.00 | |
Owner's Withdrawals | 29,500.00 |
Answer 3 a | |
Income Statement | Amount $ |
Service revenue | 144,000.00 |
Net Revenue | 144,000.00 |
Less: | |
Depreciation Expense- Equipment | 8,500.00 |
Wages Expense | 49,300.00 |
Interest Expense | 3,240.00 |
Insurance expense | 3,780.00 |
Rent Expense | 12,400.00 |
Supplies Expense | 6,080.00 |
Property taxes Expense | 5,600.00 |
Repairs expense | 2,900.00 |
Utilities Expense | 3,560.00 |
Net Income | 48,640.00 |
Answer 3 b | |
Statement of Owner's Equity | |
Opening Owner's Capital | 79,500.00 |
Add: Net Income | 48,640.00 |
Less: Dividends | 29,500.00 |
Closing balance | 98,640.00 |
Answer 3 c | ||
Balance Sheet | Amount $ | Amount $ |
Assets | ||
Current Assets | ||
Cash | 17,000.00 | |
Office Supplies | 3,420.00 | |
Prepaid Insurance | 2,220.00 | |
Total Current Assets | 22,640.00 | |
Fixed Assets | ||
Equipment | 145,530.00 | |
Accumulated Depreciation- Equipment | (32,500.00) | 113,030.00 |
Total Assets | 135,670.00 | |
Total Liabilities & Owner's Equity | ||
Liabilities | ||
Current Liabilities | ||
Accounts Payable | 7,160.00 | |
Interest Payable | 270.00 | |
Rent Payable | 400.00 | |
Wages Payable | 1,300.00 | |
Property taxes Payable | 900.00 | |
Current Liabilities | 10,030.00 | |
Non Current Liabilities | ||
Long-term notes payable | 27,000.00 | |
Non Current Liabilities | 27,000.00 | |
Total Liabilities | 37,030.00 | |
Owner's Equity | ||
Owner's Capital | 98,640.00 | |
Total Liabilities & Owner's Equity | 135,670.00 |
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