Question

11:10 PM Sun Sep 20 79% Х Siglo Deliver Services Question P2 Chapter 3 PDF - 297 KB Net income562392 Total assets: $247,148 Preparation of a Work Sheet, Financial Statements, and Adjusting and Closing Entries P2. At the end of the fiscal year, Siglo Delivery Service, Inc.'s trial balance appeared as follows. Siglo Delivery Service, Inc. Trial Balance August 31, 2014 Cash 10,072 Accounts Receivable 29,314 Prepaid Insurance 5,340 Delivery Supplies 14,700 Office Supplies 2,460 Land 15,000 Building 196,000 Accumulated Depreciation-Building 53.400 Trucks 103,800 Accumulated Depreciation--Trucks 30,900 Office Equipment 15.900 Accumulated Depreciation--Office Equipment 10.800 Accounts Payable 9,396 Unearned Lockbox Fees 8,340 Mortgage Payable 72,000 Common Stock 100,000 Retained Earnings 28,730 Dividends 30,000 Delivery Service Revenue 283.470 Lockbox Fees Earned 28,800 Truck Drivers Wages Expense 120,600 Office Salaries Expense 44.400 Gas Oil and Truck Repairs Expense 31,050 Interest Expense 7,200 625,836 625,836 10 REQUIRED

Answer 1

Siglo Delivery Service-Work Sheet-For the Year Ended August 31, 2014 Adjusted Trial Balance Trial Balance Income Statement Adjustments Balance Sheet Account Name Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Cash 10,072 10,072 10,072 Accounts Receivable (h) 816 30,130 30,130 29,3141 5,340 (a) 3,060 2.280 2.280 14.700 (b) 13,270 1,430 1,430 Prepaid Insurance Delivery Supplies Office Supplies Land 2,460 2,274 186 186 15,000 15,000 15,000

196,000 196,000 196,000 53,400 (d) 14.400 67,800 67,800 103,800 103,800 103.800 Building Accumulated Depreciation- Building Trucks Accumulated Depreciation Trucks Office Equipment Accumulated Depreciation- 30,900 (e) 15,450 46,350 46,350 15,900 15,900 15,900 Office 10.800 (f) 2.700 13,500 13,500 Equipment Accounts Payable Unearned Lockbox Fees 9,396 9,396 9.396 8,340 (g) 5,630 2,710 2,710 72,000 72,000 72.000 128,730 128,730 128,730 Mortgage Payable R. Siglo, Capital R. Siglo, Withdrawals Delivery Service Revenue Lockbox Fees Earned 30,000 30,000 30,000 283,470 283,470 283,470 28,800 (g) 5,630 35,246 35,246 (h) 8161 120,600 (i) 1,920 122,520 122,520 Truck Drivers' Wages Expense Office Salaries Expense 44,400 44,400 44,400

Gas, Oil, and Truck Repairs Expense Interest Expense 31,050 31,050 31,050 7,200 7,200 7,200 625,836 625,836 (a) 3,060 3,060 3,060 (b) 13,270 13,270 13,270 (c) 2.2741 2,274 2,274 Insurance Expense Delivery Supplies Expense Office Supplies Expense Depreciation Expense- Building Depreciation Expense Trucks Depreciation Expense-Office Equipment Wages Payable 14,400 14,400 (d) 14,400 (e) 15,450 (f) 2,700 15,450 15,450 2,700 2,700 (i) 1,920 1,920 1,920 59,5201 59,520 661,122 661,122 256,324 318,716 404,798 342,406 Net Income 62,392 62.392 318,716 318,716 404,798 404,798 2. Siglo Delivery Service Income Statement For the Year Ended August 31, 2014

Revenues Delivery services revenue $ 283,470 Lockbox fees earned 35,246 Total revenues $ 318,716 $122,520 Expenses Truck drivers' wages expense Office salaries expense Gas, oil, and truck repairs expense 44,400 31,050 Interest expense 7,200 Insurance expense 3,060 13,270 2,274 Delivery supplies expense Office supplies expense Depreciation expense—building Depreciation expense—trucks Depreciation expense—office equipment 14,400 15,450 2,700 Total expenses 256,324 Net income $ 62,392 Siglo Delivery Service Statement of Owner's Equity For the Year Ended August 31, 2014 R. Siglo, capital, August 31, 2013 $ 128,730 Net income 62,392 Subtotal $ 191,122 Less withdrawals 30,000 R. Siglo, capital, August 31, 2014 $ 161,122 Siglo Delivery Service Balance Sheet

August 31, 2014 Assets Cash $ 10,072 Accounts receivable 30,130 Prepaid insurance 2,280 1,430 Delivery supplies Office supplies 186 Land 15,000 $ 196,000 Building Less accumulated depreciation 67,800 128,200 Trucks $ 103,800 Less accumulated depreciation 46,350 57,450 $ 15,900 Office equipment Less accumulated depreciation 13,500 2,400 Total assets $ 247,148 Liabilities Accounts payable $ 9,396 Unearned lockbox fees 2,710 1,920 Wages payable Mortgage payable 72,000 Total liabilities $ 86,026 Owner's Equity R. Siglo, capital 161,122 Total liabilities and owner's equity $ 247,148 3. General Journal Date Description Debit Credit

Adjusting entries: 2014 Aug. 31 Insurance Expense 3,060 Prepaid Insurance 3,060 To record expired insurance 13,270 13,270 31 Delivery Supplies Expense Delivery Supplies To record delivery supplies used $14,700 $1,430 $13,270 2,274 31 Office Supplies Expense Office Supplies To record office supplies used 2,274 $2,460 $186 $2,274 14,400 31]Depreciation Expense—Building Accumulated Depreciation-Building To record depreciation for the year 14,400 15,450 31 Depreciation Expense—Trucks Accumulated Depreciation- Trucks To record depreciation for the year 15,450 2,700 31 Depreciation Expense—Office Equipment Accumulated Depreciation- Office 2,700 Equipment To record depreciation for the year 31 Unearned Lockbox Fees 5,630

Lockbox Fees Earned 5,630 To record earned lockbox fees Accounts 31 Receivable 816 Lockbox Fees Earned 816 To record fees earned that had not been recorded 1,920 31 Truck Drivers' Wages Expense Wages Payable To record accrued truck drivers' wages 1,920 General Journal Date Description Debit Credit Closing entries: 2014 Aug. 31 Delivery Services Revenue 283,470 Lockbox Fees Earned 35,246 Income Summary 318,716 To close the revenue accounts 256,324 122,520 31 Income Summary Truck Drivers' Wages Expense Office Salaries Expense Gas, Oil, and Truck Repairs Expense 44,400 31,050 Interest Expense 7,200

JInsurance Expense 3,060 13,270 2,274 14,400 15,450 2,700 Delivery Supplies Expense Office Supplies Expense Depreciation Expense—Building Depreciation Expense—Trucks Depreciation Expense_Office Equipment To close the expense accounts 31 Income Summary R. Siglo, Capital To close the Income Summary account 31 R. Siglo, Capital R. Siglo, Withdrawals 62,392 62,392 30,000 30,000 To close the Withdrawals account Reversing entries: Sept. 1 Lockbox Fees Earned 816 Accounts Receivable 816 To reverse fees earned that had not been recorded 1,920 1 Wages Payable Truck Drivers' Wages Expense To reverse accrued truck drivers' wages 1,920

4.   Even though the work sheet has columns for the income statement and balance sheet, it is not a substitute for the financial statements. First, the work sheet does not show the statement of owner's equity and the balance sheet is not updated for the change in owner's capital. Second, financial statements are arranged in a way to provide useful information to users. The work sheet is an internal tool for the accountant.