Question

12B-4. From the following ledger balances and additional data (pp. 448-449), do the following for Callahan Lumber for the year ended December 31, 200X 1. Prepare the worksheet. 2. Prepare the income statement, statement of owner's equity, and balance sheet. 3. Journalize and post adjusting and closing entries. (Be sure to put beginning balances in the ledger first.) 4. Prepare a post-closing trial balance. 5. ournalize the reversing entry for wages accrued. ACCT. No. 940 Cash 110 1,470 Accounts Receivable 111 5,600 Merchandise Inventory 112 260 Lumber Supplies 113 117 Prepaid Insurance 114 2,600 Lumber Equipment 121 340 122 Acc. Dep., Lumber Equipment Accounts Payable 220 1,330 221 Wages Payable 330 J. Callahan, Capital 7,562 331 J. Callahan, Withdrawals 3,500 Income Summary 332 440 Sales 23,000 441 Sales Returns and Allowances 400 550 Purchases 14,700 551 Purchases Discount 440 552 Purchases Returns and Allowances 545 660 Wages Expense 2,390 661 Advertising Expense Rent Expense 400 662 840 Dep. Exp., Lumber Equipment Lumber Supplies Expense 663 664 Insurance Expense 665 Additional Data a/b. Merchandise inventory, December 31 c. Lumber supplies on hand, December 31 d. Insurance expired e. Depreciation for the year f.Accrued wages on December 31 $3,900 60 50 400 175 III

Answer 1

2. Income & Expenditure A/c

Opening Stock	$5600	Sale $23000 (-)Returns $400	$22600
Purchases $14700 (-)Purchase discount $440 (-)Returns $545	$13715	Closing stock	$3900
Wages $2390 (+)Accrued $175	$2565
Lumber supplies purchase $260 (-)closing $60	$200
Advertising	$400
Rent	$840
Depreciation	$400
Profit for the year	$2780
	$26500		$26500

Balancesheet

Owners equity Opening $7562 (+)Insurance expired $50 (-)Drawing $3500 (+)Profit $2780	$6892	Lumber Equipment	$2600
Account payable	$1330	Prepaid insurance	$117
Accumulated depreciation	$740	Account Recievable	$1470
Wages payable	$175	Lumber supplies on hand	$60
		Closing stock	$3900
	$9137		$9137

3. Closing Entries

a) Merchandise inventory A/c Dr $3900

To Profit and loss A/c $3900

b)Lumber supplies(Asset) Dr $60

To Lumber supplies (P&L A/c) $60

c)Cash A/c Dr $50

To Capital A/c $50

d) Depreciation A/c Dr $400

To Accumulated depreciation A/c $400

e)Wages A/c Dr. $175

To Wages payable A/c $175   

5. Wages payable A/c Dr. $175

To Cash A/c $175