Question

Problem 3 J.V. Company prepared the following end-of period spreadsheet at December 31, 2019, the end of the fiscal year G Hi B C D E Unadjusted Trial Balance Debit 40,000 Adjusting Entries Credit Adjusted Trial Balance 1 Debit Credit Credit Debit 2 ఉ0 3 Cash 35,000 4 Accounts Receivable 5 Prepaid Insurance 6 Supplies 7 Land 15,000 20,000 a 4,000 11,000 15,000- 80,000- 150.000 20,000 60,000 150,000 200,000 200,000 8 Building 9 Accum. Depr.-Building 10 Accounts Payable 11 Wages Payable 12 Unearned Fees 25,000 20,000 d 5,000 25,000 32,000 30,000 25,000 12,000 20,000 e 30,000 335,000 335,000 13 B.Z. Co Capital 14 B.7. Co Drawing 20,000 20,000 315,000 15,000 300,000 a 15 Fees earmed 62,000 12,000 50,000 16 Wages Expense 17 Utilities Expense e 40,000 40,000 41.000 b 11,000 18 Insurance Expense 19 Supplies Expense 20 Depreciation Expense 21 Misc. Expense 30,000 80,000 60,000 20,000 50,000 c 55,000 d 5,000 15,000 15,000 730,000 762,000 762,000 103,000 103,000 730,000 22 Instructions 1. Prepare an income statement for the year ended December 31 2. Prepare a statement of owner's equity for the year ended December 31 3. Prepare a balance sheet as of December 31 4. Journalize the closing entries

Answer 1

1]	INCOME STATEMENT
	Fees earned		$       3,15,000
	Expenses:
	Wages expense	$         62,000
	Utilities expense	$         40,000
	Insurance expense	$         41,000
	Supplies expense	$         80,000
	Depreciation expense	$         55,000
	Misc. Expense	$         15,000
	Total expenses		$       2,93,000
	Net income		$          22,000
2]	STATEMENT OF OWNERS' EQUITY
	B.Z. Co. Capital, January 1, 2019		$       3,35,000
	Add: Net income for the year	$         22,000
	Less: Drawings	$         20,000
	Net addition during the year		$            2,000
	B.Z.Co. Capital, December 31, 20I9		$       3,37,000
3]	BALANCE SHEET
	Assets
	Current assets:
	Cash		$           40,000
	Accounts receivables		$           35,000
	Prepaid insurance		$             4,000
	Supplies		$           20,000
	Total current assets			$          99,000
	Non current assets:
	Land		$       1,50,000
	Building	$     2,00,000
	Accumulated depreciation	$         25,000	$       1,75,000
	Total non current assets			$      3,25,000
	Total assets			$      4,24,000
	Total liabilities & Owners' equity
	Current liabilities:
	Accounts payables		$           25,000
	Wages payable		$           32,000
	Unearned fees		$           30,000
	Total current liabilities			$         87,000
	Owner's equity			$      3,37,000
	Total liabilities & Owners' equity			$      4,24,000
4]	CLOSING ENTRIES:	Debit	Credit
	Fees earned	$     3,15,000
	Income summary		$       3,15,000
	[To close revenue account]
	Income Summary	$     2,93,000
	Wages expense		$           62,000
	Utilities expense		$           40,000
	Insurance expense		$           41,000
	Supplies expense		$           80,000
	Depreciation expense		$           55,000
	Misc. Expense		$           15,000
	[To close expense accounts]
	Income summary	$         22,000
	B.Z. Co. Capital		$           22,000
	[To close income summary]
	B.Z.Co. Capital	$         20,000
	B.Z.Co. Drawings		$           20,000
	[To close drawings account]