Question

The completed work sheet for Chelsey Decorators for the month of March is presented below.

Chelsey Decorators
Work Sheet
For Month Ended March 31, 20--
		TRIAL BALANCE		ADJUSTMENTS		ADJUSTED TRIAL BALANCE		INCOME STATEMENT		BALANCE SHEET
	ACCOUNT NAME	DEBIT	CREDIT	DEBIT	CREDIT	DEBIT	CREDIT	DEBIT	CREDIT	DEBIT	CREDIT
1	Cash	6,230				6,230				6,230		1
2	Supplies	532			(f)       180	352				352		2
3	Prepaid Insurance	1,248			(a)       260	988				988		3
4	Equipment	6,285				6,285				6,285		4
5	Accumulated Depreciation, Equipment		3,520		(b)       600		4,120				4,120	5
6	Office Furniture	3,680				3,680				3,680		6
7	Accumulated Depreciation, Office Furniture		2,816		(c)       470		3,286				3,286	7
8	Truck	23,799				23,799				23,799		8
9	Accumulated Depreciation, Truck		18,163		(d)       762		18,925				18,925	9
10	Accounts Payable		2,623				2,623				2,623	10
11	D. Chelsey, Capital		10,672				10,672				10,672	11
12	D. Chelsey, Drawing	3,500				3,500				3,500		12
13	Professional Fees		12,589				12,589		12,589			13
14	Salaries Expense	2,455		(e)       480		2,935		2,935				14
15	Rent Expense	1,325				1,325		1,325				15
16	Travel Expense	398				398		398				16
17	Utilities Expense	196				196		196				17
18	Advertising Expense	590				590		590				18
19	Miscellaneous Expense	145				145		145				19
20		50,383	50,383									20
21	Insurance Expense			(a)       260		260		260				21
22	Depreciation Expense, Equipment			(b)       600		600		600				22
23	Depreciation Expense, Office Furniture			(c)       470		470		470				23
24	Depreciation Expense, Truck			(d)       762		762		762				24
25	Salaries Payable				(e)       480		480				480	25
26	Supplies Expense			(f)       180		180		180				26
27				2,752	2,752	52,695	52,695	7,861	12,589	44,834	40,106	27
28	Net Income							4,728			4,728	28
29								12,589	12,589	44,834	44,834	29
30												30
31												31

Required:

1. Journalize the adjusting entries. Journalize the adjustments in the order given in the question.

GENERAL JOURNAL
DATE	DESCRIPTION		POST. REF.	DEBIT	CREDIT
20--	Adjusting Entries
Mar. 31
Mar. 31
Mar. 31
Mar. 31
Mar. 31
Mar. 31

2. Prepare an income statement.

Chelsey Decorators
Income Statement
For Month Ended March 31, 20--
Revenue:
		$
Expenses:
	$
Total Expenses
Net Income		$

3. Prepare a statement of owner's equity. Assume that no additional investments were made in March. If an amount is zero, enter "0".

Chelsey Decorators
Statement of Owner's Equity
For Month Ended March 31, 20--
		$
	$
Subtotal	$
		$

4. Prepare a balance sheet.

Chelsey Decorators
Balance Sheet
March 31, 20--
Assets
		$
	$
	$
	$
Total Assets		$
Liabilities
	$
Total Liabilities		$
Owner's Equity
Total Liabilities and Owner's Equity		$

Answer 1

Chelsey Decorators Adjusting Enteries Trans Particulars a. Insurance Expense a/c To Prepaid Insurance (Insurance expensed) Dr. Debit in $ Credit in $ 260 260 b. Depreciation Expense, Equipment a/c Dr. To Accumulated Depreciation, Equipment (To record depreciation) 600 Depreciation Expense, Office Furniture a/c Dr. To Accumulated Depreciation, Office Furniture (To record depreciation) 470 d. Depreciation Expense, Truck a/c Dr. To Accumulated Depreciation, Truck (To record depreciation) 762 e. Dr. Salaries Expense a/c To Salaries Payable (Salary accrued) 480 f. Dr. 180 Supplies Expense a/c To Supplies (Supplies expensed) -180

12589 2935 1325 398 196 Statement of Income For Month Ended March 31, 20-- Professional Fees Less: Salaries Expense Rent Expense Travel Expense Utilities Expense Advertising Expense Miscellaneous Expense Insurance Expense Depreciation Expense, Equipment Depreciation Expense, Office Furniture Depreciation Expense, Truck Supplies Expense Net Income 590 260 600 470 762 180 7861 4728 Statement of Owner's Equity For Month Ended March 31, 20-- D. Chelsey, Capital Net Income 10672 4728 15400 -3500 11900 D. Chelsey, Drawing

Balance sheet As at March 31, 20-- Assets Current Assets Cash Supplies Prepaid Insurance Amounts in $ Amounts in $ Liabilities Amounts in $ Amounts in $ Current Liabilities 6230 Accounts Payable 2623 352 Salaries Payable 480 3103 988 7570 2165 Non Current Assets Equipment Accumulated Depreciatio Office Furniture Accumulated Depreciatio Truck Accumulated Depreciatio Total Assets 6285 -4120 3680 -3286 23799 -18925 394 Owner's Equity 4874 D. Chelsey, Capital 15003 Total Libailities & Equity 11900 15003