Question

(A) 200 00 Advertising Expense Rent Expense Salaries Expense 69 30 000 800000 850 000 160 00 00 136 A 0 0 00 136 40 000 Training Fees Earned Depreciation Exp., Equipment Insurance Expense 40000 (B) (C) 50 000 (D) 35 000 145 000 14 50 00 12B-4. L01,2,3 (150 min) From the following ledger balances and additional data, do the following for Callahan Lumber for the year ended December 31, 2019: a. Prepare the worksheet. b. Prepare the income statement, statement of owner's equity, and balance sheet. c. Journalize and post adjusting and closing entries. (Be sure to put beginning balances in the ledger first.) d. Prepare a post-closing trial balance. e. Journalize the reversing entry for wages. Check Figure: Net Income $3,480 Account Balances for Callahan Lumber 110 Cash 111 Accounts Receivable 112 Merchandise Inventory 113 Lumber Supplies 114 Prepaid Insurance 121 Lumber Equipment 122 Accumulated Depreciation, Lumber Equipment 220 Accounts Payable 221 Wages Payable $ 1,140 1,270 5,600 260 117 2,600 340 1,330

Answer 1

Callahan Lumber Adjusting Enteries Trans Debit in $ Credit in $ Particulars Cost of goods sold a/c Dr. 900 а. To Inventory 900 (Inventory value adjusted) 5600-4700 Lumber Supplies Expense a/c To Lumber Supplies b. Dr. 180 180 (Supplies Expensed) 260 -80 Insurance Expense a/c Dr. С. To Prepaid Insurance 70 (Insurance expensed) Depreciation Expense Lumber Equip a/c Dr. d. 460 To Accum. Depre - Lumber Equip 460 (To record depreciation) Wages Expense a/c Dr. To Wages Payable 165 е. 165 (Wages accrued) Statement of Income For the period ending 31.12.2019 Sales 23000 Sales Returns and Allowances -400 Net Sales 22600 Cost of goods sold -14075 Gross Profit 8525 2555 Wages Expense Advertising Expense 940 Rent Expense 840 Depreciation Expense, Lumber Equipment 460 Lumber Supplies Expense 180 Insurance Expense 70 5045 Net Income 3480 70

Statement of Owner's Equity For the period ending 31.12.2019 J.Callahan, Capital 7562 Net Income 3480 11042 J.Callahan, Withdrawals -3500 7542 closing Enteries Particulars Debit in $ Credit in $ Date 31.12.2019 Income Summary a/c Dr. 19520 To Sales Returns and Allowances 400 To Cost of goods sold 14075 To Wages Expense 2555 To Advertising Expense 940 To Rent Expense 840 To Depreciation Expense, Lumber Equipment To Lumber Supplies Expense 460 180 To Insurance Expense 70 (Expense accounts closed) 31.12.2019 Sales a/c Dr. 23000 To Income Smmary 23000 (Revenue accounts closed) 31.12.2019 Income Summary a/c To J.Callahan, Capital Dr. 3480 3480 (Profits Transferred) 31.12.2019 L.Meyer, Capital a/c 3500 Dr. To J.Callahan, Withdrawals 3500 (Withdrawals charged) Reversing Enteries Debit in $ Credit in $ Particulars Date Wages Payable a/c 1.1.2020 Dr. 165 To Wages Expense 165 (Entry reversed) Wages Expense a/c Dr. 1.1.2020 165 To Cash 165 (Entry reversed)

Trial Balance For the period ending 31.12.2019 80 Unadjusted Adjustments Adjusted Post Closing Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 1140 1140 1140 1270 1270 1270 5600 900 4700 4700 260 180 80 117 70 2600 2600 2600 340 460 800 800 1330 1330 1330 165 165 165 7562 7562 7542 3500 3500 47 Acct. No. Particulars 110 Cash 111 Accounts Receivable 112 Merchandise Inventory 113 Lumber Supplies 114 Prepaid Insurance 121 Lumber Equipment 122 Accum. Depre - Lumber Equip 220 Accounts Payable 221 Wages Payable 330 J.Callahan, Capital 331 J.Callahan, Withdrawals 332 Income Summary 440 Sales 441 Sales Returns and Allowances 550 Cost of goods sold 660 Wages Expense 661 Advertising Expense 662 Rent Expense 663 Depreciation Expense, Lumber Equipment 664 Lumber Supplies Expense 665 Insurance Expense Totals 47 23000 23000 400 13175 2390 940 840 900 165 400 14075 2555 940 840 460 180 460 180 70 1775 32232 32232 1775 32857 32857 9837 9837

Balance sheet As at 31.12.2019 Amounts in $ Amounts in $ Liabilities Amounts in $ Amounts in $ Assets Current Assets Current Liabilities Accounts Payable Cash 1140 1330 Wages Payable 1495 Accounts Receivable 1270 165 Merchandise Inventory 4700 Lumber Supplies 80 Prepaid Insurance 47 7237 Non Current Assets Lumber Equipment Owner's Equity 1800 J.Callahan, Capital 9037 Total Liabilities & Equity 00 Accum. Depre Lumber -800 7542 Total Assets 9037