Question

part1

part 2

Exercise 4-7 Preparing a work sheet and recording closing entries LO P1, P2 The following unadjusted trial balance contains the accounts and balances of Dylan Delivery Company as of December 31 a. Unrecorded depreciation on the trucks at the end of the year is $40,000. b. The total amount of accrued interest expense at year-end is $6,000. C. The cost of unused office supplies still available at year-end is $2,000. 1. Use the above information about the company's adjustments to complete a 10-column work sheet. 2a. Prepare the year-end closing entries for Dylan Delivery Company as of December 31. 2b. Determine the capital amount to be reported on the December 31 balance sheet. Note: S. Dylan Capital was $307,000 on December 31 of the prior year Complete this question by entering your answers in the tabs below. Req1 Req 2A Req 25 Use the above information about the company's adjustments to complete a 10-column work sheet. DYLAN DELIVERY COMPANY Work Sheet For Year Ended December 31 Unadjusted Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet and Statement of Owner's Equity Account Title Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Cash S S 16.000 34,000 5.000 350,000 S 80 000 160,000 24,000 5,000 100,000 307,000 Accounts receivable Office supplies Trucks Accum. depreciation-Trucks Land Accounts payable Interest payable Long-term notes payable S. Dylan, Capital S. Dylan Withdrawals al Delivery fees earned Depreciation expense-Trucks Salaries expense Office supplies expense Interest expense Repairs expense-Trucks Totals Net Income Totals 34.000 263,000 40.000 110,000 15,000 5,000 10,000 779,000 $ 779,000 $ S 0 $ 0 $ 0 S 0 0 0 0 0 $ 0 05 os 0 Req Reg 2A >

part 3

Answer 1

1.Preparing Worksheet:-

DYLAN DELIVERY COMPANY

Worksheet

December 31

Accounts	Unadjusted	Trial Balance	Adjusting	Entries	Unadjusted	Trial Balance	Income	Statement	Balance	Sheet
	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	$16,000				$16,000				$16,000
Accounts Receivable	34,000				34,000				34,000
Office Supplies	5,000			c. $3,000	2,000				2,000
Trucks	350,000				350,000				350,000
Accumulated Depreciation, Trucks		$80,000		a. $40,000		$120,000				$120,000
Land	160,000				160,000				160,000
Accounts Payable		24,000				24,000				24,000
Interest Payable		5,000		b. $1,000		6,000				6,000
Long-term Notes Payable		100,000				100,000				10,000
S. Dylan, Capital		307,000				307,000				307,000
S. Dylan, Withdrawals	34,000				34,000				34,000
Delivery Fees Earned		263,000				263,000		$263,000
Depreciation Expense, Trucks	40,000		a. $40,000		80,000		$80,000
Salaries Expense	110,000				110,000		110,000
Office Supplies Expense	15,000		c. $3,000		18,000		18,000
Interest Expense	5,000		b. $1,000		6,000		6,000
Repairs Expense, Trucks	10,000				10,000		10,000
Totals	$779,000	$779,000	$44,000	$44,000	$820,000	$820,000	$224,000	$263,000	$596,000	$557,000
						Net Income	$39,000			$39,000
						Totals	$263,000	$263,000	$596,000	$596,000

Working Notes:-

b. Total amount of accrued interest expense is $6,000. Interest Expense show in unadjusted Trial Balance of $5,000. So Debited the Interest Expense and Credited the interest Payable by $1,000 ($6,000-$5,000).

c. Calculations for Office Supplies Expense:-

Office Supplies Expense=(Office Supplies - Unused Office Supplies)

=($5,000-$2,000)

=$3,000

2a. Preparing Closing Entries:-

Closing Entries:- These Entries are prepared at the end of the period and close all temporary accounts by transferred to Income Summary Account which is also a temporary account. Income Summary transferred to Owner's Equity or Owner's Capital which is a permanent Account which shows in Balance Sheet.

DYLAN DELIVERY COMPANY

General Journal (Closing Entries)

December 31

Date	Accounts Title and Explanation	Debit	Credit
December 31	Delivery Fees Earned	$263,000
	Income Summary		$263,000
	(To close Revenue Account)
December 31	Income Summary	$224,000
	Depreciation Expense, Trucks		$80,000
	Salaries Expense		$110,000
	Office Supplies Expense		$18,000
	Interest Expense		$6,000
	Repairs Expense, Trucks		$10,000
	(To close Expenses Accounts)
December 31	Income Summary	$39,000
	S. Dylan, Capital		$39,000
	(To close Income Summary Account)
December 31	S. Dylan, Capital	$34,000
	S. Dylan, Withdrawals		$34,000
	(To close Withdrawals Account)

2b. Calculations for the amount of Capital Account reported on December 31 Balance Sheet:-

S. Dylan, Capital, December 31=(S. Dylan, Capital, Beginning+ Net Income)- S. Dylan, Withdrawals

=($307,000+$39,000)-$34,000

=($346,000-$34,000)

=$312,000

So the Amount of Capital Account reported on December 31 in Balance Sheet is $312,000.