Question

Select a Section Select a Study Objective STANDARD VIEW GLS Complete worksheet; prepare financial statements, closing entries, and post-closing trial balance. (LO 1, 2, 4) The adjusted trial balance columns of the worksheet for Alshwer Company are as follows. Cr. 5,300 Account No. 101 112 126 130 157 158 ALSHWER COMPANY Worksheet For the Year Ended December 31, 2019 Adjusted Trial Balance Account Titles Dr. Cash Accounts Receivable 10,800 Supplies 1,500 Prepaid Insurance 2,000 Equipment 27,000 Accumulated Depreciation Equipment 5,600 Notes Payable 15,000 Accounts Payable 6,100 Salaries and Wages Payable 2,400 Interest Payable 600 Common Stock 10,000 Retained Earnings 3,000 Dividends 7,000 Service Revenue 61,000 Advertising Expense 8,400 Supplies Expense 4,000 200 201 212 230 311 320 332 400 610 631

Answer 1

(a) Worksheet along with financial statement columns is prepared as follows:

D F G ALSHWER COMPANY Worksheet For the year ended December 31, 2019 Adjusted Trial Balance Income Statement Balance Sheet Account Names Debit Credit Debit Credit Debit Credit 6 Cash 5300 =B6 7 Accounts Receivable 10800 =B7 8 Supplies 1500 =B8 . Prepaid insurance 2000 =B9 10 Equipment 27000 =B10 Accumulated 11 Depreciation Equipment 5600 =C11 12 Accounts Payable 6100 =C12 13 Interest Payable 600 =C13 14 Salaries and wages payable 2400 =C14 15 Notes payable 15000 =C15 16 common stock 10000 =C16 17 Retained earnings 3000 =C17 18 Dividends 7000 19 Service revenue 61000 =C19 20 Salaries and wages expense 28000 =B20 21 Advertising expense 8400 =B21 22 Insurance expense 3500 =B22 23 Depreciation expense 5600 =B23 24 Supplies Expense 4000 =B24 25 Interest expense 600 =B25 26 Total =SUM(B6:B25) =SUM(C6:C25) =SUM(D6:D25) =SUM(E6:E25) =SUM(F6:F25) =SUM(G6:G25) Net income =E26-D26 =D27 28 Total =D26+D27 =E26+E27 =F26+F27 =G26+G27 =B18 27

F G B B C D E ALSHWER COMPANY Worksheet For the year ended December 31, 2019 Adjusted Trial Balance Income Statement Debit Credit Debit Credit 5,300 10,800 1,500 Account Names Balance Sheet | Debit Credit 5,300 10.800 1,500 2,000 27,000 2,000 27,000 6 Cash 7 Accounts Receivable 8 Supplies 9 Prepaid insurance 10 Equipment Accumulated 11 Depreciation Equipment 12 Accounts Payable 13 Interest Payable 14 Salaries and wages payable 15 Notes payable 16 common stock 17 Retained earnings 18 Dividends 19 Service revenue 20 Salaries and wages expense 21 Advertising expense 22 Insurance expense 23 Depreciation expense 24 Supplies Expense 25 Interest expense 26 Total 27 28 Total 5,600 6,100 6001 2,400 15,000 10,000 3,000 5,600 6,100 600 2,400 | 15.000 | 10,000 3,000 17,000 61,000 7,000 61,000 28.000 8,400 3,500 5,600 4,000 600 103,700 28,000 8,400 3,500 5,600 4,000 600 50,100 10,900 61,000 103,700 Net income 61,000 53,600 42,700 10,900 61,000 53,600 53,600

(b)

Income statement and statement of retained earnings is prepared as follows:

А ALSHWER COMPANY Income statement For the year ended December 31, 2019 4 Revenue: 5 Service revenue 61000 6 Expense: 7 Advertising expense 8400 8 Supplies expense 4000 9 Depreciation expense 5600 10 Insurance expense 3500 11 Salaries and wages expense 28000 12 Interest expense 1600 13 Total expense =SUM(B7:B12) 14 Net income C5-C13 15 ALSHWER COMPANY 17 Retained Earning Statement 18 For the year ended December 31, 2019 19 Particulars Amount (S) Amount (S) 20 Retained Earnings, January 1, 2019 3000 21 Add: Net Income 10900 22 Less: Dividends -7000 23 Retained Earnings, December 31, 2019 =B20+B21+B22 16

Α BC ALSHWER COMPANY Income statement For the year ended December 31, 2019 4 Revenue: 5 Service revenue 61000 6 Expense: 7 Advertising expense 8400 8 Supplies expense 4000 9 Depreciation expense 5600 10 Insurance expense 3500 11 Salaries and wages expense 28000 12 Interest expense 13 Total expense 50100 14 Net income 10900 15 ALSHWER COMPANY Retained Earning Statement Retai For the year ended December 31, 2019 19 Particulars Amount ($) Amount (S) | 20 Retained Earnings, January 1, 2019 3,000 21 Add: Net Income 10,900 22 Less: Dividends (7,000) 23 Retained Earnings, December 31, 2019 6,900 600 10 000

The classified balance sheet is prepared as follows:

27 Amount (S) 29 5300 10800 1500 2000 =SUM(C31:C34) А B ALSHWER COMPANY Balance Sheet As on December 31, 2019 Particulars Details (S) Assets 30 Current Assets: 31 Cash 32 Accounts receivable 33 Supplies 34 Prepaid insurance 35 Total current assets 36 Property, plant and equipment 37 Equipment 27000 38 Less: Depreciation -5600 39 Net property, plant and equipment 40 Total Assets 41 Liabilities and Shareholders' Equity 42 Current Liabilities: 43 Accounts payable 6100 44 Salaries and wages payable 2400 45 Notes payable (due in April, 2020) 5000 46 Interest payable 600 47 Total current liabilities 48 Long Term Liabilities: 49 Notes payable =15000-5000 50 Total long-term liabilities 51 Shareholders' Equity: 52 Common stock 10000 53 Retained earnings 6900 54 Total Shareholders' Equity 55 Total liabilities and Shareholders' Equity =B37+B38 =C38 =C35+C39 =SUM(B43:B46) =B49 =SUM(B52:B53) =C47+C50+C54

в с ALSHWER COMPANY Balance Sheet As on December 31, 2019 Particulars Details (S) Amount (S) 29 Assets 30 Current Assets: 31 Cash 53001 32 Accounts receivable 10800 33 Supplies 1500 34 Prepaid insurance 2000 35 Total current assets 196001 36 Property, plant and equipment 37 Equipment 27000 38 Less: Depreciation -5600 21400 39 Net property, plant and equipment 21400 40 Total Assets 41000 41 Liabilities and Shareholders' Equity 42 Current Liabilities: 43 Accounts payable 6100 44 Salaries and wages payable 2400 45 Notes payable (due in April, 2020) 5000 46 Interest payable 600 47 Total current liabilities 141001 48 Long Term Liabilities: 49 Notes payable 10000 50 Total long-term liabilities 10000 51 Shareholders' Equity: 52 Common stock 10000 53 Retained earnings 6,900 54 Total Shareholders' Equity 16900 55 Total liabilities and Shareholders' Equity 41000

(c) Preparing closing entries:

Date Accounts and Explanation Service revenue Income Summary (To close revenue account) Debit (S) Credit (S) 61,000 61,000 50,100 Income summary Advertising expense Supplies expense Depreciation expense Insurance expense Salaries and wages expense Interest expense (To close expense accounts) 8400 4000 5600 3500 28000 600 10,900 Income Summary Retained Earnings (To close net income to retained earnings) 10,900 7.000 Retained earnings Dividends (To close dividends to retained earnings) 7,000

(d) Posting closing entries:

A B Date Explanation Service revenue Advertising expense Supplies expense Depreciation expense Insurance expense Salaries and wages expense Interest expense Retained earnings Balance (ending) C DE F. Journal "Debit ($) Credit () Balance (8) Ref. 61000 =E64 8400 =F64-D65+E65 4000 =F65-D66+E66 5600 =F66-D67+E67 3500 =F67-D68+E68 28000 =F68-D69+E69 600 =F69-D 70+E70 10900 =F70-D71+E71 =F71

B Date Explanation Service revenue Advertising expense Supplies expense Depreciation expense Insurance expense Salaries and wages expense Interest expense Retained earnings Balance (ending) C D E FE Journal Debit Credit Balance Ref. (S) (S) (S) 61000 61000 8400 52600 4000 48600 56001 43000 3500 39500 28000 11500 600 10900 10900

(e) Post-closing trial balance is prepared as follows:

А в с 76 Post closing trial balance 77 For the year ended December 31,2019 78 Particulars Debit (S) Credit (S) 79 Cash 5300 80 Accounts Receivable 10800 81 Supplies 1500 82 Prepaid insurance 2000 83 Equipment 27000 84 Accumulated Depreciation Equipment 5600 85 Accounts Payable 6100 86 Interest Payable 600 87 Salaries and wages payable 2400 88 Notes payable 15000 89 Common stock 10000 90 Retained earnings 6900 91 Total =SUM(B79:B90) =SUM(C79:C90) |

C Credit (S) A B 76 Post closing trial balance 77 For the year ended December 31,2019 78 Particulars Debit (S) 79 Cash 5,300 80 Accounts Receivable 10,800 81 Supplies 1,500 82 Prepaid insurance 2,000 83 Equipment 27,000 84 Accumulated Depreciation—Equipment 85 Accounts Payable 86 Interest Payable 87 Salaries and wages payable 88 Notes payable 89 Common stock 90 Retained earnings 91 Total 46,600 5,600 6,100 600 2,400 15,000 10,000 6,900 46,600