Question

The following unadjusted trial balance is for Wright's Wrecking Ball Company as of December 31", 2019. The December 31" 2018 balance in the owner's capital account was $50,000, and the owner invested $40,000 cash in the company during 2019. Debit Credit $ 10,000 15.000 14.000 150,000 $ 10,000 4,650 Cash Supplies Prepaid insurance Equipment Accum. Dep. - Equipment Accounts payable Interest payable Rent payable Wages payable Property taxes payable Utilities payable Long-term notes payable Owner's Capital Withdrawals Fees earned Depreciation expense - Equip Wages expense Interest expense Insurance expense Rent expense Supplies expense Property taxes expense Repairs expense Utilities expense Totals 30,000 90,000 10,000 136,000 40,000 1.650 12,000 9,000 4.000 5.000 $270,650 $270,650 1. Using the spreadsheet below, develop three 2019 trial balances for the company based on the following additional information: (25 points.) a. The supplies available at the end of 2019 had a cost of $6,000. b. The cost of expired (used) insurance for 2019 is $7,000. c. Annual depreciation on equipment is $5,000. d. The December utilities expense of $500 is not included in the unadjusted trial balance. e. The company's employees have earned $3,000 of accrued wages by the end of December. f. Rent expense of $2,000 has been incurred, but not yet paid or recorded by year end.

Answer 1

Wright's Wrecking Ball Company Adjusting Enteries Trans. Particulars a. Supplies Expense a/c To Supplies (Supplies expensed) Dr. Debit in $ Credit in $ 9000 9000 Dr. 7000 Insurance expense a/c To Prepaid Insurance (Insurance expensed) 7000 5000 Depreciation Expense - Equip a/c Dr. To Accum. Depre - Equip (Depreciation charged to Equip) 5000 d. Dr. 500 Utilities Expense a/c To Utilities Payable (Expense accrued) 500 3000 Wages expense a/c Dr. To Wages payable (Wages accrued) 3000 f. Dr. 2000 Rent Expense a/c To Rent Payable (Rent accrued) 2000 Dr. 500 Property Tax Expense a/c To Property Tax Payable (Expense accrued) 500 h. Dr. 200 Interest Expense a/c To Interest Payable (Interest accrued) 200

Trial Balance For the period ending 31.12.2019 Particulars Cash Supplies Prepaid Insurance Equipment Accum. Depre - Equip Accounts Payable Wages payable Property Taxes Payable Utilities Payable Rent Payable Interest Payable Long Term Note Payable Owner's Capital Withdrawals Fees Earned Depreciation Expense - Equip Wages expense Interest Expense Insurance expense Rent Expense Supplies Expense Property Tax Expense Repairs Expense Utilities Expense Totals Unadjusted Adjustments Adjusted Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 10000 10000 15000 9000 6000 14000 7000 7000 150000 150000 10000 5000 15000 4650 4650 3000 3000 500 500 500 500 2000 2000 200 200 30000 30000 90000 90000 10000 10000 136000 136000 5000 5000 40000 3000 43000 1650 200 1850 7000 7000 12000 2000 14000 9000 9000 9000 500 9500 4000 4000 5000 500 5500 270650 270650 27200 27200 281850 281850

136000 Statement of Income For the period ending 31.12.2019 Fees Earned Less: Depreciation Expense - Equip Wages expense Interest Expense Insurance expense Rent Expense Supplies Expense Property Tax Expense Repairs Expense Utilities Expense Net Income 5000 43000 1850 7000 14000 9000 9500 4000 5500 98850 37150 Statement of Owner's Equity For the period ending 31.12.2019 Owner's Capital Net Income 90000 37150 127150 -10000 117150 Withdrawals

Balancesheet As at 31.12.2019 Assets Current Assets Cash Supplies Prepaid Insurance Amounts in $ Amounts in $ Liabilities Amounts in $ Amounts in $ Current Liabilities 10000 Accounts Payable 4650 6000 Wages payable 3000 7000 23000 Property Taxes Payable 500 Utilities Payable 500 Rent Payable 2000 150000 Interest Payable 200 10850 - 15000 135000 Non Current Liabilities Long Term Note Payable 30000 Non Current Assets Equipment Accum. Depre-Equip Owner's Equity Owner's Capital 158000 Total Liabilities & Equity 117150 158000 Total Assets