Question

KANEOHE RENOVATIONS

Unadjusted Trial Balance

December 31, 2019

    Cash                                                                                          $4,000
    Accounts receivable                                                                      1,800
    Construction supplies                                                                   1,360
    Prepaid insurance                                                                        1,940
    Investment in Sierra, Inc., common shares (long-term)                    8,000
    Trucks                                                                                        38,000
    Accumulated depreciation, trucks                                                               $15,000
    Construction equipment                                                                6,400
    Accumulated depreciation, construction equipment                                     2,300
    Building                                                                                    103,000
    Accumulated depreciation, building                                                            38,600
    Land                                                                                          24,000
    Franchise                                                                                   35,000
    Unearned renovation service revenue                                                        1,950
    Notes payable, long term                                                                           83,400
    Capital, Mary Jones                                                                                  66,075
    Withdrawals, Mary Jones                                                            32,000
    Renovation architecture fees                                                                     14,800
    Renovation services revenue                                                                     96,000
    Gas, oil, and repairs expense                                                        4,825
    Interest expense                                                                           7,650
    Renovation wages expense                                                         34,050
    Office salaries expense                                                              16,100                                                                                                              
    TOTAL                                                                                   $318,125    $318,125

(1)      Set-up the T-ACCTS for the items in the trial balance above plus these additional accounts:

Wages Payable

Depreciation Expense, Building

Depreciation Expense, Construction Equipment

Depreciation Expense, Trucks

Insurance Expense

Construction Supplies Expense

Enter the trial balance amounts in the T-ACCTS.

(2)      Use the information that follows to prepare and record adjusting journal entries.

(a)      Insurance premiums of $1,115 expired during the year.

(b)      An inventory count shows $1,232 of unused construction supplies on hand.

(c)      Depreciation on the construction equipment, $1,625.

(d)      Depreciation on the trucks, $9,400.

(e)      Depreciation on the building, $4,900.

(f)       Of the $1,950 balance in the Unearned Renovation Service Revenue account, $725 was earned by the year-end.

(g)      Accrued renovation architecture fees earned but unrecorded at year-end totaled $2,100.

(h)      There were $960 of earned but unrecorded wages for an employee at the year-end.

(3)      Post the adjusting entries to T-Accounts.

(4)      Prepare an adjusted trial balance.

(5)      In good form, prepare an income statement, a statement of owner’s equity, and a balance sheet. A $10,400 installment on the long-term note payable is due within one year.

Answer 1

Book1 - Microsoft Excel - X Home Insert Page Layout Formulas Data Review View Cut Copy Arial - General 1 1 Wrap Text 3 Merge & Center - LE Paste Format Painter Clipboard 222222 3 14 - Autosum * - A » A A B T U - Conditional Format Formatting as Table Styles Cell Styles Insert Delete Format 2 Clear Sort & Filter Editing Find & Select Font Alignment Number Cells - KANEOHE RENOVATIONS A1 A 2 J K L M N Date 1,115.00 KANEOHE RENOVATIONS Adjusting Journal Entries Particular Debit Credit a) Insurance Expenses $ 1,115.00 To Prepaid Insurance $ (Being amount of Insurance Expired) b) Construction Supplies Expense 128.00 To Construction Supplies $ (Being amount of Construction Supplies) C) Depreciation Expense-Equipment 1,625.00 To Accumulated Depreciation- Equipment (Being amount of Depreciation- construction Equipment d) Depreciation Expense-Truck 9,400.00 128.00 9 10 $ 1,625.00 13 9,400.00 16 $ 4,900.00 To Accumulated Depreciation-Truck (Being amount of Depreciation-Truck e) Depreciation Expense-Building To Accumulated Depreciation- Building (Being amount of Depreciation- Building Sheet1 Sheet2 Sheet3 Select destination and press ENTER or choose Paste 17 4,900.00 18 Average: 28776.9 Count: 384 + Sum: 2589921 80 op - 100% 0 ve 14:22 ENG 10-02-2020

Book1 - Microsoft Excel - X Home Insert Page Layout Formulas Data Review View Cut Copy Arial - General 1 1 - Wrap Text 3 Merge & Center 3 LE Paste Format Painter Clipboard Autosum * 14 - - A » A A B T U - - % 8.09 Conditional Format Formatting as Table Styles Cell Styles Insert Delete Format 2 Clear Sort & Filter Editing Find & Select Font Alignment Number Cells A1 А D E F G H I J K L M N 4,900.00 fac KANEOHE RENOVATIONS C (Being amount of Depreciation-Truck e) Depreciation Expense-Building $ To Accumulated Depreciation- Building (Being amount of Depreciation- Building Unearned Renovation Service To Renovation Service Revenue $ 4,900.00 725.00 $ 725.00 T-Accounts Cash Account Date Debit Credit Debit Balance Credit Balance Account Title December 31st Balance pebe _ credi 4,000.00 Accounts Receivable Credit Debit Balance Date Account Title 33 December 31st Adjustment Balance Sheet1 Sheet2 Sheet3 Ready Credit Balance 1800 3,900.00 34 2,100.00 Average: 28776.9 Count: 384 Sum: 2589921 80 100% 0 + 14:22 ORADENG 10 10-02-2020

Book1 - Microsoft Excel - X Home Insert Page Layout Formulas Data Review View Cut Copy Arial - General 1 1 - Wrap Text 3 Merge & Center 3 LE Paste Format Painter Clipboard Autosum * 14 - - A » A A B T U - Conditional Format Formatting as Table Styles Cell Styles Insert Delete Format 2 Clear Sort & Filter Editing Find & Select Font Alignment Number Cells fx KANEOHE RENOVATIONS A1 A с F G H I J K L M N Construction Supplies Date Debit Credit Debit Balance Account Title December 31st Balance Adjustment Credit Balance 1,360.00 40 $ 128.00 $ 1,232.00 Prepaid Insurance Deh Credit Debit Balance 47 Date Account Title December 31st Adjustment Credit Balance 1940 825.00 S 1,115.00 $ Investment in Sierra Inc.-Common Shares Date Account Title Debit Credit Debit Balance Credit Balance December 31st Balance 8,000.00 54 55 H S heet1 Sheet2 Sheet3 Ready Average: 28776.9 Count: 384 + Sum: 2589921 80 op - 100% 0 - 14:22 ENG 10-02-2020

Book1 - Microsoft Excel - X Home Insert Page Layout Formulas Data Review View Cut Copy Arial - General 1 1 - Wrap Text 3 Merge & Center 3 LE Paste Format Painter Clipboard Autosum * 14 - - A » A A B T U - Conditional Format Formatting as Table Styles Cell Styles Insert Delete Format 2 Clear Sort & Filter Editing Find & Select Font Alignment Number Cells A1 - fac KANEOHE RENOVATIONS >> IN 2 A F G H I J K L M N Trucks Date Debit Credit Debit Balance Credit Balance Account Title Balance Balance 38,000.00 Accumulated Depreciation-Trucks Date Debit Credit Debit Balance Account Title Balance Credit Balance $ 15,000.00 $ 24,400.00 9,400.00 Construction Equipment Date Debit Credit Credit Balance Account Title Balance Balance Debit Balance $ 6,400.00 Accumulated Depreciation Construction Equipment Date Account Title Debit Credit Debit Balance Balance Credit Balance $ 2,300.00 $ 3,925.00 $ 1,625.00 Sheet1 Sheet2 Sheet3 Ready Average: 28776.9 Count: 384 + Sum: 2589921 80 op - 100% 0 - 14:22 ENG 10-02-2020

Book1 - Microsoft Excel - X Home Insert Page Layout Formulas Data Review View Cut Copy Arial - General 1 1 Wrap Text 3 Merge & Center - 3 14 - Autosum * - A » A A Paste B T U - - % 8.09 Insert Delete Format Format Painter Clipboard Conditional Format Formatting as Table Styles Cell Styles 2 Clear Sort & Filter Editing Find & Select Font Alignment Number Cells A1 ДА Foc KANEOHE RENOVATIONS со ТЕ S 1,625.00 G H I J K L M N 76 $ 3,925.00 Building Date Debit Credit Credit Balance Account Tide Balance Balance Debit Balance $ 4,03,000.00 Accumulated Depreciation-Building Date Account Title Debit Credit Debit Balance Balance Credit Balance $ 38,600.00 $ 43,500.00 $ 4,900.00 Land Date Debit Credit Debit Balance Credit Balance Account Title Balance Balance 24,000.00 Franchise 94 95 96 Date Debit Credit Debit Balance Credit Balance K Sheet1 Account Title Sheet2 Sheet3 Ready Average: 28776.9 Count: 384 + Sum: 2589921 80 op - 100% 0 - 14:22 ENG 10-02-2020 O

Book1 - Microsoft Excel - X Home Insert Page Layout Formulas Data Review View Cut Copy Arial - General 1 1 - Wrap Text 3 Merge & Center 3 LE Paste Format Painter Clipboard Autosum * 14 - - A » A A B T U - Conditional Format Formatting as Table Styles Cell Styles Insert Delete Format 2 Clear Sort & Filter Editing Find & Select Font Alignment Number Cells A1 ТАА Balance Balance fx KANEOHE RENOVATIONS с TD TE $ 24,000.00 F G H I J K L M N Bals 94 Franchise Date Debit Credit Credit Balance Account Tide Balance Balance Debit Balance $ 35,000.00 98 Unearned Renovation Service Revenue 99 100 101 Date 102 Balance Account Title Debit Credit Debit Balance Credit Balance 1950 103 Adjustment S 725.00 $ 1,225.00 Notes Payable-Long Term 206 Account Title Debit Credit Debit Balance 107 Date 108 Balance Credit Balance 83400 109 Capital-Mary Jones 110 111 112 Ke Ready Sheet1 Sheet2 Sheet30 Average: 28776.9 Count: 384 Sum: 2589921 80 PA 100% DENG 0 14:23 10-02-2020 + .

Book1 - Microsoft Excel - X Home Insert Page Layout Formulas Data Review View Cut Copy Arial - General 1 1 - Wrap Text 3 Merge & Center 3 LE Paste Format Painter Clipboard Autosum * 14 - - A » A A B T U - Conditional Format Formatting as Table Styles Cell Styles Insert Delete Format 2 Clear Sort & Filter Editing Find & Select Font Alignment Number Cells A1 fic KANEOHE RENOVATIONS A F G H I J K L M N Capital-Mary Jones 111 112 113 Date Account Title Debit Credit Debit Balance Credit Balance 66075 Balance 115 116 117 Withdrawal -May Jones 118 Account Title Debit Credit Debit Balance Credit Balance 119 Date 120 Balance 32000 121 122 Renovation Service Revenue 123 Account Title Debit Credit Debit Balance 124 125 Date 126 Balance 127 Credit Balance 96000 $ 96,725.00 Adjustment $ 725.00 128 Renovation Architecthre Fees 129 120 Sheet1 Sheet2 Sheet30 > Ke Ready Average: 28776.9 Count: 384 + Sum: 2589921 80 100% 0 14:23 OP ANDENG 10 10-02-2020

Book1 - Microsoft Excel - X Home Insert Page Layout Formulas Data Review View Cut Copy Arial - General 1 1 Wrap Text 3 Merge & Center - 3 14 - Autosum * - A » A A B T U - Conditional Format Formatting as Table Styles Cell Styles Insert Delete Format 2 Clear Sort & Filter Editing Find & Select Font Alignment Number Cells LE Paste Format Painter Clipboard - A1 ДА 127 Adjustment 128 fc KANEOHE RENOVATIONS G H I J K L M N S 725.00 $ 96,725.00 Renovation Architecthre Fees 129 Account Title Debit Credit Debit Balance Date 132 Balance Credit Balance 14800 $ 16,900.00 I S 2,100.00 134 Gas Oil and Repair Expense Date Account Title Debit Credit Debit Balance Credit Balance Balance 4,825.00 140 Interest Expense 141 142 Date 143 Debit Credit Debit Balance Account Title Balance Credit Balance 7,650.00 144 Renovation Wages Expense 145 146 W Ready Sheet1 Sheet2 Sheet3 Average: 28776.9 Count: 384 Sum: 2589921 op O - 100% 0 14:23 ENG 10-02-2020

Book1 - Microsoft Excel - X Home Insert Page Layout Formulas Data Review View Cut Copy Arial - General 1 1 Wrap Text 3 Merge & Center - 3 14 - Autosum * - A » A A Paste B T U - Insert Delete Format Conditional Format Formatting as Table Styles Format Painter Clipboard Cell Styles 2 Clear Sort & Filter Editing Find & Select Font Alignment Number Cells - fx KANEOHE RENOVATIONS F G H I J K L M N A1 ДА 145 146 Renovation Wages Expense 147 Date Account Title Debit Credit Debit Balance Credit Balance 148 Balance 34050 35,010.00 149) Adjustment 960.00 Office Salaries Expense Date Credit Credit Balance Account Title Balance Debit Balance $ 16,100.00 Depreciation Expense-Construction Equipment Date Debit Credit Debit Balance Credit Balance Account Title Adjustment 1,625.00 Depreciation Expense-Trucks Debit Balance Credit Balance 9,400.00 Adjustment 161 162 Date 163 164 165 Ke Ready Sheet1 Sheet2 Sheet3 Average: 28776.9 Count: 384 + Sum: 2589921 80 op - 100% 0 14:23 ENG 10-02-2020

Book1 - Microsoft Excel - X Home Insert Page Layout Formulas Data Review View Cut Copy Arial - General 1 1 Wrap Text 3 Merge & Center - 3 14 - Autosum * - A » A A Paste B T U - Insert Delete Format Conditional Format Formatting as Table Styles Format Painter Clipboard Cell Styles 2 Clear Sort & Filter Editing Find & Select Font Alignment Number Cells A1 - fx KANEOHE RENOVATIONS А F G H I J K L M N Depreciation Expense-Building 165 166 167 168 Date Debit pebe Credit Account Title Adjustment creste Debit Balance Debe Balance r Credit Balance 4,900.00 ede Balance 169 I S Wages Payable Date Account Title Debit Credit craft Debit Balance Credit Balance pebe Balance Adjustment 2100 176 179 Adjusting Trial Balance on December 31st 177 178 Account Title Debit Credit Cash 4,000.00 180 Accounts Receivable 3,900.00 181 Construction Supplies S 1,232.00 182 Prepaid Insurance 825.00 183 Investment in Sierra Inc. $ 8,000.00 184 Trucks 38,000.00 Accumulated 105 Inenreciation-Trucks ► Sheet1 Sheet2 Sheet3 Ready $ 24 400 001 Average: 28776.9 Count: 384 + Sum: 2589921 80 op - 100% 0 14:23 ENG 10-02-2020

Book1 - Microsoft Excel - X Home Insert Page Layout Formulas Data Review View Cut Copy Arial - General 1 1 - Wrap Text 3 Merge & Center 3 LE Paste Format Painter Clipboard Autosum * 14 - - A » A A B T U - Conditional Format Formatting as Table Styles Cell Styles Insert Delete Format 2 Clear Sort & Filter Editing Find & Select Font Alignment Number Cells F G H I J K L M N $ A1 fx KANEOHE RENOVATIONS ГДА 177 178 Account Title Debit Credit 179 Cash 4,000.00 180 Accounts Receivable 3,900.00 181 Construction Supplies 1,232.00 182 Prepaid Insurance 825.00 183 Investment in Sierra Inc. $ 8,000.00 184 Trucks 38,000.00 Accumulated 185 Depreciation-Trucks 24,400.00 186 Construction Equipments 6,400.00 Accumulated Depreciation-Construction 187 Equipment 3,925.00 188 Building 1,03,000.00 Accumulated 189 Depreciation Building $ 43,500.00 190 Land 24,000.00 191 Franchise 35,000.00 Unearned Renovation 192 Service Revenue 1,225.00 193 Wages Payable 960.00 Notes Payable-Long 194 Term 83,400.00 Ke Sheet1 Sheet2 Sheet30 Ready Average: 28776.9 Count: 384 + Sum: 2589921 80 op - 100% 0 14:23 ENG 10-02-2020

Book1 - Microsoft Excel - X Home Insert Page Layout Formulas Data Review View Cut Copy Arial - General 1 1 - Wrap Text 3 Merge & Center 3 LE Paste Format Painter Clipboard Autosum * 14 - - A » A A B T U - Conditional Format Formatting as Table Styles Cell Styles Insert Delete Format 2 Clear Sort & Find & Filter Select Editing Font Alignment Number Cells A1 fc KANEOHE RENOVATIONS с G H J K L M N 195 Capital-Mary Jones 66,075.00 32,000.00 16,900.00 96,725.00 4,825.00 7,650.00 196 Withdrawals -Mary Jones $ Renovation Architech 197 fees Renovation Service 198 Revenue Gas, Oil and Repairs 199 Expense 200 Interest Expense $ Renovation Wages 201 Expense 202 Office Salaries Expense Depreciation Expense- 203 Trucks Depreciation- 204 Construction Equipments 205 Depreciation Building 206 Insurance Expense Construction Supplies 207 Expense 208 Total 35,010.00 16,100.00 9,400.00 $ 1,625.00 4,900.00 1,115.00 128.00 3,37,110.00 $ 3,37,110.00 209 210 211 Ke Ready Sheet1 Sheet2 Sheet30 Average: 28776.9 Count: 384 + Sum: 2589921 80 op - 100% 0 14:23 ENG 10-02-2020