Question

Completion of a Work Sheet Showing a Net Loss

1. Complete the Adjustments columns.

2. Complete the work sheet.

3. Enter the adjustments in a general journal. If an amount box does not require an entry, leave it blank.

The trial balance for Cascade Bicycle Shop, a business owned by David Lamond, is shown below.

Cascade Bicycle Shop Trial Balance December 31, 20 --
ACCOUNT TITLE	DEBIT BALANCE	CREDIT BALANCE
Cash	23,105
Accounts Receivable	15,325
Merchandise Inventory	30,635
Supplies	7,000
Prepaid Insurance	4,665
Land	28,415
Building	49,750
Accumulated Depr.—Building		16,000
Store Equipment	26,490
Accumulated Depr.—Store Equip.		8,830
Accounts Payable		3,645
Wages Payable
Sales Tax Payable		2,845
Unearned Storage Revenue		5,530
Mortgage Payable		40,800
D. Lamond, Capital		165,000
D. Lamond, Drawing	32,795
Income Summary
Sales		51,240
Sales Returns and Allowances	2,565
Storage Revenue
Purchases	21,385
Purchases Returns and Allow.		1,245
Purchases Discounts		1,975
Freight-In	1,515
Wages Expense	35,480
Advertising Expense	5,780
Supplies Expense
Phone Expense	2,125
Utilities Expense	9,160
Insurance Expense
Depreciation Expense—Building
Depreciation Exp.—Store Equipment
Miscellaneous Expense	920
	297,110	297,110

Year-end adjustment information is as follows:

(a and b)	Merchandise inventory costing $21,815 is on hand as of December 31, 20--. (The periodic inventory system is used.)
(c)	Supplies remaining at the end of the year, $2,385.
(d)	Unexpired insurance on December 31, $1,745.
(e)	Depreciation expense on the building for 20--, $3,750.
(f)	Depreciation expense on the store equipment for 20--, $3,532.
(g)	Unearned storage revenue as of December 31, $1,905.
(h)	Wages earned but not paid as of December 31, $725.1. Complete the Adjustments columns. 2. Complete the work sheet. If an amount box does not require an entry, leave it blank. Cascade Bicycle Shop Work Sheet For Year Ended December 31, 20-- TRIAL BALANCE ADJUSTMENTS ADJUSTED TRIAL BALANCE INCOME STATEMENT BALANCE SHEET ACCOUNT TITLE DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT Cash 23105 Accounts Receivable 15325 Merchandise Inventory 30635 Supplies 7000 Prepaid Insurance 4665 Land 28415 Building 49750 Accumulated Depr.—Building 16000 Store Equipment 26490 Accumulated Depr.—Store Equip. 8830 Accounts Payable 3645 Wages Payable Sales Tax Payable 2845 Unearned Storage Revenue 5530 Mortgage Payable 40800 D. Lamond, Capital 165000 D. Lamond, Drawing 32795 Income Summary Sales 51240 Sales Returns and Allowances 2565 Storage Revenue Purchases 21385 Purchases Returns and Allow. 1245 Purchases Discounts 1975 Freight-In 1515 Wages Expense 35480 Advertising Expense 5780 Supplies Expense Phone Expense 2125 Utilities Expense 9160 Insurance Expense Depreciation Expense—Building Depreciation Exp.—Store Equip. Miscellaneous Expense 920 297110 297110 Net Loss

Answer 1

Cascade Bicycle Shop
Worksheet
For the Year Ended December 31, 20--
Account Title	Trial Balance		Adjustments		Adjusted Trial Balance		Income Statement		Balance Sheet
	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	23105				23105				23105
Accounts receivable	15325				15325				15325
Merchandise inventory	30635		21815	30635	21815				21815
Supplies	7000			4615	2385				2385
Prepaid insurance	4665			2920	1745				1745
Land	28415				28415				28415
Building	49750				49750				49750
Accumulated depr.-building		16000		3750		19750				19750
Store equipment	26490				26490				26490
Accumulated depr.-store equip.		8830		3532		12362				12362
Accounts payable		3645				3645				3645
Wages payable				725		725				725
Sales tax payable		2845				2845				2845
Unearned storage revenue		5530	3625			1905				1905
Mortgage payable		40800				40800				40800
D. Lamond, capital		165000				165000				165000
D. Lamond, drawing	32795				32795				32795
Income summary			30635	21815	8820				8820
Sales		51240				51240		51240
Sales returns and allowances	2565				2565		2565
Storage revenue				3625		3625		3625
Purchases	21385				21385		21385
Purchase returns and allowances		1245				1245		1245
Purchases discounts		1975				1975		1975
Freight-in	1515				1515		1515
Wages expense	35480		725		36205		36205
Advertising expense	5780				5780		5780
Supplies expense			4615		4615		4615
Phone expense	2125				2125		2125
Utilities expense	9160				9160		9160
Insurance expense			2920		2920		2920
Depreciation expense-building			3750		3750		3750
Depreciation exp.-store equip.			3532		3532		3532
Miscellaneous expense	920				920		920
Totals	297110	297110	71617	71617	305117	305117	94472	58085	210645	247032
Net Loss								36387	36387
Totals							94472	94472	247032	247032