The Trial Balance section of the worksheet for Contemporary Fashions for the period ended...

The Trial Balance section of the worksheet for Contemporary Fashions for the period ended December 31, 2013, appears on the next page. Adjustments data are also given.

ADJUSTMENTS

a. Supplies used, $14,400

b. Expired insurance, $9,600

c. Depreciation expense for machinery, $4,800

INSTRUCTIONS

1. Complete the worksheet.

2. Prepare an income statement.

3. Prepare a statement of owner’s equity.

4. Prepare a balance sheet.

5. Journalize the adjusting entries in the general journal, page 3.

6. Journalize the closing entries in the general journal, page 4.

7. Prepare a postclosing trial balance.

Analyze: If the adjusting entry for expired insurance had been recorded in error as a credit to Insurance Expense and a debit to Prepaid Insurance for $9,600, what reported net income would have resulted?