The following unadjusted trial balance is for Power Demolition Company as of the end of its April 30, 2017, fiscal year. The April 30, 2016, credit balance of the owner's capital account was $46,900, and the owner invested$40,000 cash in the company during the 2017 fiscal year.

$$\begin{array}{c} \textbf{POWER DEMOLITION COMPANY}\\ \textbf{Unadjusted Trial Balance}\\ \textbf{June 30, 2017} \end{array}$$

No.	Account Title	Debit	Credit
101	Cash	$7,000
126	Supplies	16,000
128	Prepaid insurance	12,600
167	Equipment	200,000
168	Accumulated depreciation- Equipment		$ 14,000
201	Accounts payable		6,800
203	Interest payable		0
208	Rent payable		0
210	Wages payable		0
213	Property taxes payable		0
251	Long-term notes payable		30,000
301	J. Bonn, Capital		86,900
302	J. Bonn, Withdrawals	12,000
401	Demolition fees earned		187,000
612	Depreciation expense- Equipment	0
623	Wages expense	41,400
633	Interest expense	3,300
637	Insurance expense	0
640	Rent expense	13,200
652	Supplies expense	0
683	Property taxes expense	9,700
684	Repairs expense	4,700
690	Utilities expense	4,800
	Totals	$324,700	$ 324,700

Required

1. Prepare and complete a 10-column work sheet for fiscal year 2017, starting with the unadjusted trial balance and including adjustments based on these additional facts.
 a. The supplies available at the end of fiscal year 2017 had a cost of $7,900.
 b. The cost of expired insurance for the fiscal year is$10,600.
 c. Annual depreciation on equipment is $7,000.
 d. The April utilities expense of$650 is not included in the unadjusted trial balance because the bill arrived after the trial balance was prepared. The $800 amount owed needs to be recorded.
 e. The company's employees have earned$2,000 of accrued wages at fiscal year-end.
 f. The rent expense incurred and not yet paid or recorded at fiscal year-end is $3,000.
 g. Additional property taxes of$550 have been assessed for this fiscal year but have not been paid or recorded in the accounts.
 h. The long-term note payable bears interest at 12% per year. The unadjusted Interest Expense account equals the amount paid for the first 11 months of the 2017 fiscal year. The $300 accrued interest for April has not yet been paid or recorded. (The company is required to make a$10,000 payment toward the note payable during the 2018 fiscal year.)
2. Using information from the completed 10-column work sheet in part 1, journalize the adjusting entries and the closing entries.
3. Prepare the income statement and the statement of owner's equity for the year ended April 30 and the classified balance sheet at April 30, 2017.

Analysis Component
4. Analyze the following separate errors and describe how each would affect the 10-column work sheet. Explain whether the error is likely to be discovered in completing the work sheet and, if not, the effect of the error on the financial statements.
 a. Assume the adjusting entry to reflect expiration of insurance coverage for the period was recorded with a $2,000 credit to Prepaid Insurance and a$2,000 debit to Insurance Expense. The adjustment should have been for $10,600.
 b. When the adjusted trial balance in the work sheet was completed, assume that the$4,700 Repairs Expense account balance is extended to the Debit column of the Balance Sheet columns.

Describe an unadjusted trial balance? An adjusted trial balance?

The adjusted trial balance of Karise Repairs on December 31, 2015, follows.

$$\begin{array}{c} \textbf{KARISE REPAIRS}\\ \text{Adjusted Trial Balance}\\ \text{December 31, 2015}\\ \end{array}$$

1. Prepare an income statement and a statement of owner's equity for the year 2015 , and a classified balance sheet at December 31, 2015. There are no owner investments in 2015.

2. Enter the adjusted trial balance in the first two columns of a six-column table. Use columns three and four for closing entry information and the last two columns for a post-closing trial balance. Insert an Income Summary account as the last item in the trial balance.

3. Enter closing entry information in the six-column table and prepare journal entries for it.

4. Assume for this part only that a. None of the $\$ 800$ insurance expense had expired during the year. Instead, assume it is a prepayment of the next period's insurance protection. b. There are no earned and unpaid wages at the end of the year. (Hint: Reverse the $\$ 600$ wages payable accrual.) Describe the financial statement changes that would result from these two assumptions.

The following unadjusted trial balance is for Ace Construction Co. as of the end of its 2017 fiscal year. The June 30, 2016, credit balance of the owner's capital account was $53,660, and the owner invested$35,000 cash in the company during the 2017 fiscal year.

$$\begin{array}{c} \textbf{ACE CONSTRUCTION CO.}\\ \textbf{Unadjusted Trial Balance}\\ \textbf{June 30, 2017} \end{array}$$

Required

1. Prepare and complete a 10-column work sheet for fiscal year 2017, starting with the unadjusted trial balance and including adjustments based on these additional facts.
 a. The supplies available at the end of fiscal year 2017 had a cost of $3,300.
 b. The cost of expired insurance for the fiscal year is$3,800.
 c. Annual depreciation on equipment is $8,400.
 d. The June utilities expense of$650 is not included in the unadjusted trial balance because the bill arrived after the trial balance was prepared. The $650 amount owed needs to be recorded.
 e. The company's employees have earned$1,800 of accrued wages at fiscal year-end.
 f. The rent expense incurred and not yet paid or recorded at fiscal year-end is $500.
 g. Additional property taxes of$1,000 have been assessed for this fiscal year but have not been paid or recorded in the accounts.
 h. The long-term note payable bears interest at 12% per year. The unadjusted Interest Expense account equals the amount paid for the first 11 months of the 2017 fiscal year. The $250 accrued interest for June has not yet been paid or recorded. (The company is required to make a$5,000 payment toward the note payable during the 2018 fiscal year.)
2. Using information from the completed 10-column work sheet in part 1, journalize the adjusting entries and the closing entries.
3. Prepare the income statement and the statement of owner's equity for the year ended June 30 and the classified balance sheet at June 30, 2017.

Analysis Component
4. Analyze the following separate errors and describe how each would affect the 10-column work sheet. Explain whether the error is likely to be discovered in completing the work sheet and, if not, the effect of the error on the financial statements.
 a. Assume that the adjustment for supplies used consisted of a credit to Supplies and a debit to Supplies Expense for $3,300, when the correct amount was$6,600.
 b. When the adjusted trial balance in the work sheet is completed, assume that the $18,500 Cash balance is incorrectly entered in the Credit column.

Weiss Company is incorporated at the beginning of this year and engages in a number of transactions. The following journal entries impacted its stockholders’ equity during its first year of operations.

$$\begin{matrix} \text{a.} & \text{Cash} & \text{120,000}\\ \quad & \text{Common Stock, \$1 Par Value} & \quad & \text{3,000}\\ \quad & \text{Paid-In Capital in Excess of Par Value, Common Stock} & \quad & \text{117,000}\\ \text{b.} & \text{Organization Expenses} & \text{40,000}\\ \quad & \text{Common Stock, \$1 Par Value} & \quad & \text{1,000}\\ \quad & \text{Paid-In Capital in Excess of Par Value, Common Stock} & \quad & \text{39,000}\\ \text{c.} & \text{Cash} & \text{13,300}\\ \quad & \text{Accounts Receivable} & \text{8,000}\\ \quad & \text{Building} & \text{37,000}\\ \quad & \text{Notes Payable} & \quad & \text{18,300}\\ \quad & \text{Common Stock, \$1 Par Value} & \quad & \text{800}\\ \quad & \text{Paid-In Capital in Excess of Par Value, Common Stock} & \quad & \text{39,200}\\ \text{d.} & \text{Cash} & \text{60,000}\\ \quad & \text{Common Stock, \$1 Par Value} & \quad & \text{1,200}\\ \quad & \text{Paid-In Capital in Excess of Par Value, Common Stock} & \quad & \text{58,800}\\ \end{matrix}$$

1. Explain the transaction(s) underlying each journal entry (a) through (d). 2. How many shares of common stock are outstanding at year-end? 3. What is the amount of minimum legal capital (based on par value) at year-end? 4. What is the total paid-in capital at year-end? 5. What is the book value per share of the common stock at year-end if total paid-in capital plus retained earnings equals $283,200?

Weiss Company was incorporated at the beginning of this year and had a number of transactions. The following journal entries impacted its stockholders’ equity during its first year of operations.

Required

1. Explain the transaction(s) underlying each journal entry (a) through (d).

2. How many shares of common stock are outstanding at year-end?

3. What is the total paid-in capital at year-end?

4. What is the book value per share of the common stock at year-end if total paid-in capital plus retained earnings equals $283,200?

The following unadjusted trial balance is for Adams Construction Co. as of the end of its 2011 fiscal year. The June 30, 2010, credit balance of the owner’s capital account was $52,660, and the owner invested$25,000 cash in the company during the 2011 fiscal year.

Required
1. Prepare a 10-column work sheet for fiscal year 2011, beginning with the unadjusted trial balance and including adjustments based on these additional facts.
 a. The supplies available at the end of fiscal year 2011 had a cost of $8,100.
 b. The cost of expired insurance for the fiscal year is$11,500.
 c. Annual depreciation on equipment is $18,000.
 d. The April utilities expense of$700 is not included in the unadjusted trial balance because the bill arrived after the trial balance was prepared. The $700 amount owed needs to be recorded.
 e. The company’s employees have earned$2,200 of accrued wages at fiscal year-end.
 f. The rent expense incurred and not yet paid or recorded at fiscal year-end is $5,360.
 g. Additional property taxes of$450 have been assessed for this fiscal year but have not been paid or recorded in the accounts.
 h. The long-term note payable bears interest at 12% per year. The unadjusted Interest Expense account equals the amount paid for the first 11 months of the 2011 fiscal year. The $200 accrued interest for April has not yet been paid or recorded. (Note that the company is required to make a$4,000 payment toward the note payable during the 2012 fiscal year.) 2. Enter adjusting and closing information in the work sheet; then journalize the adjusting and closing entries.
3. Prepare the income statement and the statement of owner’s equity for the year ended April 30 and the classified balance sheet at April 30, 2011.

Analysis Component
4. Analyze the following separate errors and describe how each would affect the 10-column work sheet. Explain whether the error is likely to be discovered in completing the work sheet and, if not, the effect of the error on the financial statements.
 a. Assume the adjustment for expiration of the insurance coverage consisted of a credit to Prepaid Insurance and a debit to Insurance Expense for $3,100, when the correct amount was$11,500.
 b. When the adjusted trial balance in the work sheet is completed, assume that the $6,700 Repairs Expense account balance is extended to the Debit column of the balance sheet columns.

The adjusted trial balance for Sharp Construction as of December 31, 2011 is shown below:

J. Sharp invested $50,000 cash in the business during year 2011 (the December 31, 2010, credit balance of the J. Sharp, Capital account was$32,700). Sharp Construction is required to make a $6,600 payment on its long-term notes payable during 2012.

Required
1. Prepare the income statement and the statement of owner’s equity for the calendar year 2011 and the classified balance sheet at December 31, 2011.
2. Prepare the necessary closing entries at December 31, 2011.
3. Use the information in the financial statements to compute these ratios: (a) return on assets (total assets at December 31, 2010, was$200,000), (b) debt ratio, (c) profit margin ratio (use total revenues as the denominator), and (d) current ratio.

Identify which of the following accounts would not be listed on the company’s Post-Closing Trial Balance.

Prepaid insurance          $ 9,444
Land                        34,000
Notes payable               48,000
Retained earnings           31,315
Insurance expense           12,689
Service revenue             82,500
Supplies                     9,700
Salaries expense            51,500

Identify which of the following accounts would be included in a post-closing trial balance.

$$\begin{matrix} \text{\_\_\_\_\_\_ a. Accounts Receivable} & \text{\_\_\_\_\_ c. Goodwill} & \text{\_\_\_\_\_\_ e. Income Tax Expense}\\ \text{\_\_\_\_\_\_ b. Salaries Expense} & \text{\_\_\_\_\_ d. Land} & \text{\_\_\_\_\_\_ f. Salaries Payable}\\ \end{matrix}$$

Rainbow Services Co. offers its services to individuals desiring to improve their personal mages. After the accounts have been adjusted at August 31, the end of the fiscal year, the following balances were taken from the ledger of Rainbow Services:

$$\begin{array}{lrlr} \text{Retained Earnings}&\$\hspace{5pt}\text{2,650,000}&\text{Rent Expense}&\$\hspace{5pt}\text{185,000}\\ \text{Dividends}&\text{10,000}&\text{Supplies Expense}&\text{26,200}\\ \text{Fees Earned}&\text{1,050,000}&\text{Miscellaneous Expense}&\text{28,600}\\ \text{Wages Expense}&\text{886,000}\\ \end{array}$$

Journalize the four entries required to close the accounts.

On December 31, Hawkin's records show the following accounts. Use this information to prepare a statement of retained earnings for Hawkin for the month ended December 31. Hint: Net income is $5,800.

Cash$ 5,100
Accounts receivable                        600
Supplies                                 2,000
Equipment                               14,000
Accounts payable                         6,000
Common stock                             6,900
Retained earnings, December 1            4,000
Dividends                                1,000
Services revenue                        16,000
Wages expense                            8,000
Rent expense                             1,500
Utilities expense                          700

Heel-To-Toe Shoes’ adjusted trial balance on December 31, 2011 is shown below:

Required
1. Prepare an income statement and a statement of owner’s equity for the year 2011, and a classified balance sheet at December 31, 2011. There are no owner investments in 2011.
2. Enter the adjusted trial balance in the first two columns of a six-column table. Use the middle two columns for closing entry information and the last two columns for a post-closing trial balance. Insert an Income Summary account (No. 901) as the last item in the trial balance.
3. Enter closing entry information in the six-column table and prepare journal entries for it.

Analysis Component
4. Assume for this part only that
 a. None of the $1,100 insurance expense had expired during the year. Instead, assume it is a prepayment of the next period’s insurance protection.
 b. There are no earned and unpaid wages at the end of the year. (Hint: Reverse the$3,200 wages payable accrual.)

Describe the financial statement changes that would result from these two assumptions.

On July 1, 2011, Lucinda Fogle formed a new self-storage business, KeepSafe Co. The following transactions occurred during the company’s first month.

July 1 Fogle invested $20,000 cash and buildings worth$120,000 in the company.
 2 The company rented equipment by paying $1,800 cash for the first month’s (July) rent.
 5 The company purchased$2,300 of office supplies for cash.
 10 The company paid $5,400 cash for the premium on a 12-month insurance policy. Coverage begins on July 11.
 14 The company paid an employee$900 cash for two weeks’ salary earned.
 24 The company collected $8,800 cash for storage fees from customers.
 28 The company paid$900 cash for two weeks’ salary earned by an employee.
 29 The company paid $850 cash for minor repairs to a leaking roof.
 30 The company paid$300 cash for this month’s telephone bill.
 31 Fogle withdrew $1,600 cash from the company for personal use.

The company’s chart of accounts follows:

Required
1. Use the balance column format to set up each ledger account listed in its chart of accounts.
2. Prepare journal entries to record the transactions for July and post them to the ledger accounts. The company records prepaid and unearned items in balance sheet accounts.
3. Prepare an unadjusted trial balance as of July 31.
4. Use the following information to journalize and post adjusting entries for the month:
 a. Two-thirds of one month’s insurance coverage has expired.
 b. At the end of the month,$1,550 of office supplies are still available.
 c. This month’s depreciation on the buildings is $1,200.
 d. An employee earned$180 of unpaid and unrecorded salary as of month-end.
 e. The company earned $950 of storage fees that are not yet billed at month-end.
5. Prepare the income statement and the statement of owner’s equity for the month of July and the balance sheet at July 31, 2011.
6. Prepare journal entries to close the temporary accounts and post these entries to the ledger.
7. Prepare a post-closing trial balance.