Question

*P3-12 (L03,4,5,9) (Worksheet, Balance Sheet, Adjusting and Closing Entries) Cooke Company has a fiscal year ending on September 30. Selected data from the September 30 worksheet are presented below. Cooke Co.xls Review View Home Insert Page Layout Formulas Data P18 А B D E 2 COOKE COMPANY 3 3 Worksheet 4 For The Month Ended September 30, 2017 5 Trial Balance Adjusted Trial Balance 6 Account Titles Dr. Cr. Dr. Cr. 7 Cash 37,400 37,400 8 Supplies 18,600 4,200 9 Prepaid Insurance 31,900 3,900 10 Land 80,000 80,000 11 Equipment 120,000 120,000 12 Accumulated Depreciation Equipment 36,200 42,000 13 Accounts Payable 14,600 14,600 14 Unearned Service Revenue 2,700 700 15 Mortgage Payable 50,000 50,000 16 Common Stock 107,700 107,700 17 Retained Earnings, Sept. 1, 2017 2,000 2,000 18 Dividends 14,000 14,000 19 Service Revenue 278,500 280,500 20 Salaries and Wages Expense 109,000 109,000 21 Maintenance and Repairs Expense 30,500 30,500 22 Advertising Expense 9,400 9,400 23 Utilities Expenses 16,900 16,900 24 Property Tax Expense 18,000 21,000 25 Interest Expense 6,000 12,000 26 Totals 491,700 491,700 27 Insurance Expense 28,000 28 Supplies Expense 14,400 29 Interest Payable 6,000 30 Depreciation Expense 5,800 31 Property Taxes Payable 3,000 32 Totals 506,500 506,500 Instructions (a) Prepare a complete worksheet. (b) Prepare a classified balance sheet. (Note: $10,000 of the mortgage payable is due for payment in the next fiscal year.) (e) Journalize the adjusting entries using the worksheet as a basis. Using Your Judgment 145 (d) Journalize the closing entries using the worksheet as a basis. (e) Prepare a post-closing trial balance.

Answer 1

1. Worksheet -

COOKE COMPANY Worksheet For the month ended September 30, 2017 Trial Balance Adjustments Adjusted Trial Balance Accounts Title Dr Cr. Dr Cr. Dr Cr. Cash $ 37,400 $ 37,400 Supplies $ 18,600 $ 14,400 $ 4,200 Prepaid Insurance $ 31,900 $ 28,000 $ 3,900 Land $ 80,000 $ 80,000 Equipment $ 120,000 $ 120,000 Accumulated Depreciation - Equipment $ 36,200 $ 5,800 $ 42,000 Accounts Payable $ 14,600 $ 14,600 Unearned Service Revenue $ 2,700$ 2,000 $ 700 Mortgage Payable $ 50,000 $ 50,000 Common Stock $ 107,700 $ 107,700 Retained Earnings Sept 1, 2017 $ 2,000 $ 2,000 Dividends $ 14,000 $ 14,000 Service Revenue $ 278,500 $ 2,000 $ 280,500 Salaries and Wages Expense $ 109,000 $ 109,000 Maintenance and Repairs Expense $ 30,500 $ 30,500 Advertising Expense $ 9,400 $ 9,400 Utilities Expense $ 16,900 $ 16,900 Property Tax Expenses $ 18,000 $ 3,000 $ 21,000 Interest Expense $ 6,000 $ 6,000 $ 12,000 Total $ 491,700 $ 491,700 Insurance Expense $ 28,000 $ 28,000 Supplies Expense $ 14,400 $ 14,400 Interest Payable $ 6,000 $ 6,000 Depreciation Expense $ 5,800 $ 5,800 Property Tax Payable $ 3,000 $ 3,000 $ 59,200 $ 59,200 $ 506,500 $ 506,500

2. Adjusting Entries -

Date Credit COOKE COMPANY Adjusting Entries Accounts Title Supplies Expense Supplies (Being Supplies Utilised) Debit $ 14,400 1 $ 14,400 2 Insurance Expense $ 28,000 Prepaid Insurance (Being Insurance Expense Expired) $ 28,000 3 5,800 Depreciation Expense $ Accumulated Depreciation - Equipment (Being depreciation expense incurred) $ 5,800 4 $ 2,000 Unearned Service Revenue Service Revenue (Being Revenue Earned) $ 2,000 5 3,000 Property Tax Expenses $ Property Tax Payable (Being Property Tax Expense Incurred) $ 3,000 6 6,000 Interest Expense $ Interest Payable (Being Interest Expense incurred) $ 6,000

3. Closing Entries -

Date Credit COOKE COMPANY Closing Entries Accounts Title Debit Income Summary $ 280,500 Service Revenue (Being Revenue Account Closed) 1 $ 280,500 2 Income Summary $ 247,000 Salaries and Wages Expense Maintenance and Repairs Expense Advertising Expense Utilities Expense Property Tax Expenses Interest Expense Insurance Expense Supplies Expense Depreciation Expense (Being Expense accounts Closed) $ 109,000 $ 30,500 $ 9,400 $ 16,900 $ 21,000 $ 12,000 $ 28,000 $ 14,400 $ 5,800 3 Income Summary $ 33,500 Retained Earnings (Being Balance transferred to retained earnings) $ 33,500 4 Retained Earnings $ 14,000 Dividends (Being dividend account closed) $ 14,000

4. Post Closing Trial Balance -

Credit COOKE COMPANY Post Closing Trial Balance Accounts Title Debit Cash $ 37,400 Supplies $ 4,200 Prepaid Insurance $ 3,900 Land $ 80,000 Equipment $ 120,000 Accumulated Depreciation - Equipment Accounts Payable Unearned Service Revenue Mortgage Payable Interest Payable Property Tax Payable Common Stock Retained Earnings $ 42,000 $ 14,600 $ 700 $ 50,000 $ 6,000 $ 3,000 $ 107,700 $ 21,500 Total $ 245,500 $ 245,500

5. Balance Sheet -

COOKE COMPANY Balance Sheet September 30, 2017 Assets Current Asset: Cash Supplies Prepaid Insurance Land Total Current Assets $ 37,400 $ 4,200 $ 3,900 $ 80,000 $ 125,500 Equipment $ 120,000 (-) Accumulated Depreciation - Equipment $ (42,000) $ 78,000 Total Assets $ 203,500 Liabilities and Stockholder's Equity Current Liabilities: Accounts Payable Unearned Service Revenue Mortgage Payable Interest Payable Property Tax Payable Total Current Liabilities $ 14,600 $ 700 $ 50,000 $ 6,000 $ 3,000 $ 74,300 Total Liabilities $ 74,300 Stockholder's Equity: Common Stock Retained Earnings Total Stockholder's Equity $ 107,700 $ 21,500 $ 129,200 Total Liabilities and Stockholder's Equity $ 203,500