ing Cycle Review Problem 1c1v4p
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Comprehensive ing Cycle Review Problem Student Name: James Fair Complete the Comprehensive Problem, beginning on page 2, on the included work papers. A solution to this problem is not available for your reference, by design. It is time for you to complete a problem on your own. The following check figures are provided: Unadjusted Trial Balance Adjusted Trial Balance Net Income Total Assets Post-Closing Trial Balance
$101,920 $102,175 $13,465 $92,260 $92,440
Comprehensive ing Cycle Review Problem On December 1st Curt Williamson began an auto repair shop, Williamsons Quality Automotive. The following information about December’s transactions, s, and adjustment data is available. Transactions
Dec. 1 1 9 10 19 22 26 28 31 31 31 31
1 Williamson contributed $50,000 cash to the business in exchange for capital. Purchased $10,800 of equipment paying cash. Paid $4,500 for a 9-month insurance policy starting on December 1. Paid $18,000 cash to purchase land to be used in operations. Purchased office supplies on , $3,000. Borrowed $28,000 from the bank for business use. Williamson signed a note payable to the bank in the name of the business. Paid $800 for advertising expenses. Paid $1,000 on . The business received a bill for utilities to be paid in January, $280. Revenues earned during the month included $17,500 cash and $2,700 on . Paid employees' salaries $3,600 and building rent $700. Record as a compound entry. The business received $1,440 for auto screening services to be performed next month. Williamson withdrew cash of $3,000.
s Cash; s Receivable; Office Supplies; Prepaid Insurance; Equipment; Accumulated Depreciation-Equipment; Land; s Payable; Utilities Payable; Interest Payable; Unearned Revenue; Notes Payable; Williamson, Capital; Williamson, Withdrawals; Service Revenue; Salaries Expense; Rent Expense; Utilities Expense; Advertising Expense; Supplies Expense; Insurance Expense; Interest Expense; and Depreciation ExpenseEquipment. Adjustment Data a. Office Supplies used during the month, $600. b. Depreciation for the month, $180. c. One month insurance has expired. d. Accrued Interest Expense, $75. Requirements: Complete the following on the attached work papers 1. 2. 3. 4. 5.
Prepare the journal entries and post to the T-s. Prepare an unadjusted trial balance. Prepare the adjusting entries and post to the T-s. Prepare an adjusted trial balance. Prepare the income statement, the statement of owner's equity, and a classified balance sheet. Use proper formatting techniques including headings, dollar signs, and underlining.
1
6. 7.
Prepare the closing entries and post to the T-s. Prepare a post-closing trial balance.
GENERAL JOURNAL DATE
TITLES AND EXPLANATION
DEBIT
CREDIT
Record Transactions, Adjusting Entries, Closing Entries in this journal Dec. 1
Dec. 1
Dec. 1
Dec. 9
Cash Williamson Capital Owner Contribution
$50,000
Equipment Cash Purchased Equipment
10,800
Pre-paid Insurance Cash Paid rent in advance
4,500
Land Cash Paid cash for land
18,000
$50,000
10,800
4,500
18,000
Dec. 10 Office Supplies s Payable Purchased office supplies on
3,000
Dec. 19
Cash Notes Payable Collected cash on note
28,000
Advertising Expense Cash Paid cash expense
800
s Payable Cash Paid cash on
1,000
Utilities Expense Cash Paid Cash Expense
280
Dec. 22
Dec. 26
Dec. 28
3,000
28,000
800
1,000
280
2
GENERAL JOURNAL DATE Dec. 31
Dec. 31
Dec. 31
Dec. 31
TITLES AND EXPLANATION
DEBIT
Cash s Payable Service Revenue Performed services collected cash and credit.
17,500 2,700
Salaries expense Rent Expense Cash Paid cash expenses
3,600 700
Cash Unearned revenue Collected cash for future services.
1,440
Williamson, withdrawals Cash Owner Withdrawal
3,000
CREDIT
20,200
4,300
1,440
3,000
3
GENERAL LEDGER
Cash
50,000
10,800
28,000
4,500
17,500 1,440
s Receivable
Office Supplies
Prepaid Insurance
2,700
4,500
3,000
18,000 800 1,000 &
280
4,300 & 3,000
Equipment 10,800 1,000
Accumulated Depreciation – Equip.
s Payable
18,000
3,000
Utilities Payable
Land
Interest Payable
Unearned Revenue
Notes Payable-Williamson
1,440
28,000
Capital-Williamson 50,000
Withdrawals
Service Revenue
3,000
20,200
4
Salaries Expense 3,600
Rent Expense 700
Insurance Expense
Utilities Expense
Advertising Expense
280
Supplies Expense
800
Interest Expense
Depreciation Exp. Equip.
5
Income Summary
Unadjusted Trial Balance Williamson Quality Automotive Unadjusted Trial Balance Month End December 31st
Debits Cash Office Supplies Prepaid Insurance Equipment Land s Payable Rent Expense Unearned revenue
Credits
$54,260 3,000 4,500 10,800 18,000 2000 800 1,440 28,000 50,000
Notes Payable-Williamson Capital - Capital-Williamson Williamson (Withdrawals) Service Revenue Salaries expense Advertising Expense Utilities expense s Receivable Total
3,000 20,200 3,600 800 280 2700 $101,920 $101,920
6
Adjusted Trial Balance Williamson Quality Automotive Adjusted Trial Balance Month End December 31st
Debits Cash Office Supplies Prepaid Insurance Accumulated Depreciation - Insurance Equipment Accumulated Depreciation – Equipment Land s Payable Unearned revenue
Credits
$54,260 2,400 4,500 500 10,800 180 18,000 2,000 1,440 28,000 50,000
Notes Payable-Williamson Capital - Capital-Williamson Williamson (Withdrawals) Service Revenue Rent Expense Salaries expense Advertising Expense Utilities expense s Receivable Depreciation Expense - Insurance Depreciation Expense – Equipment -Supplies Expense Interest Expense Total
3,000 20,200 800 3,600 800 280 2700 500 180 600 75 $102,175 $102,175
7
Income Statement
Williamson Quality Automotive Income Statement Month End December 31st
Revenues: Service Revenue
20,200
Expenses: Salaries expense Advertising Expense Utilities expense s Receivable Depreciation Expense - Insurance Depreciation Expense – Equipment Supplies Expense Interest Expense Rent Expense Total Expenses Net Income
3,600 800 280 2700 500 180 600 75 800 $9,535 $10,665
Statement of Changes in Owner’s Equity Williamson Quality Automotive Owners Equity Month End December 31st
Williamson Capital December 1 Owner Contribution Net Income for the month
0 50,000 10,665 60,665 (3,000) $57,665
Owner Withdrawal Williamson Capital December 31
8
Balance Sheet Williamson Quality Automotive Balance Sheet Month End December 31st
Assets Cash Office Supplies Prepaid Insurance Accum. Dep. – Insurance Land Equipment Accum. Dep. – Equipment Total Assets
$54,260 2,400 4,500 (500) 18,000 10,800 (180) $89,280
Liabilities s Payable 2,000 Unearned revenue Notes Payable-Williamson
1,440 28,000 5 0
Total Liabilities $31,440
Owner’s Equity Williamson Capital Total Liabilities & Owners Equity
9
$57,665 $89,280
Post-Closing Trial Balance Williamson Quality Automotive Post-Closing Trial Balance Month End December 31st
Debits Cash Office Supplies Prepaid Insurance Accumulated Depreciation - Insurance Equipment Accumulated Depreciation – Equipment Land s Payable Unearned revenue
Credits
$54,260 2,400 4,500 500 10,800 180 18,000
Notes Payable-Williamson Capital - Capital-Williamson Total:
$92,440
10
2,000 1,440 28,000 50,000 $92,440
$101,920 $102,175 $13,465 $92,260 $92,440
Comprehensive ing Cycle Review Problem On December 1st Curt Williamson began an auto repair shop, Williamsons Quality Automotive. The following information about December’s transactions, s, and adjustment data is available. Transactions
Dec. 1 1 9 10 19 22 26 28 31 31 31 31
1 Williamson contributed $50,000 cash to the business in exchange for capital. Purchased $10,800 of equipment paying cash. Paid $4,500 for a 9-month insurance policy starting on December 1. Paid $18,000 cash to purchase land to be used in operations. Purchased office supplies on , $3,000. Borrowed $28,000 from the bank for business use. Williamson signed a note payable to the bank in the name of the business. Paid $800 for advertising expenses. Paid $1,000 on . The business received a bill for utilities to be paid in January, $280. Revenues earned during the month included $17,500 cash and $2,700 on . Paid employees' salaries $3,600 and building rent $700. Record as a compound entry. The business received $1,440 for auto screening services to be performed next month. Williamson withdrew cash of $3,000.
s Cash; s Receivable; Office Supplies; Prepaid Insurance; Equipment; Accumulated Depreciation-Equipment; Land; s Payable; Utilities Payable; Interest Payable; Unearned Revenue; Notes Payable; Williamson, Capital; Williamson, Withdrawals; Service Revenue; Salaries Expense; Rent Expense; Utilities Expense; Advertising Expense; Supplies Expense; Insurance Expense; Interest Expense; and Depreciation ExpenseEquipment. Adjustment Data a. Office Supplies used during the month, $600. b. Depreciation for the month, $180. c. One month insurance has expired. d. Accrued Interest Expense, $75. Requirements: Complete the following on the attached work papers 1. 2. 3. 4. 5.
Prepare the journal entries and post to the T-s. Prepare an unadjusted trial balance. Prepare the adjusting entries and post to the T-s. Prepare an adjusted trial balance. Prepare the income statement, the statement of owner's equity, and a classified balance sheet. Use proper formatting techniques including headings, dollar signs, and underlining.
1
6. 7.
Prepare the closing entries and post to the T-s. Prepare a post-closing trial balance.
GENERAL JOURNAL DATE
TITLES AND EXPLANATION
DEBIT
CREDIT
Record Transactions, Adjusting Entries, Closing Entries in this journal Dec. 1
Dec. 1
Dec. 1
Dec. 9
Cash Williamson Capital Owner Contribution
$50,000
Equipment Cash Purchased Equipment
10,800
Pre-paid Insurance Cash Paid rent in advance
4,500
Land Cash Paid cash for land
18,000
$50,000
10,800
4,500
18,000
Dec. 10 Office Supplies s Payable Purchased office supplies on
3,000
Dec. 19
Cash Notes Payable Collected cash on note
28,000
Advertising Expense Cash Paid cash expense
800
s Payable Cash Paid cash on
1,000
Utilities Expense Cash Paid Cash Expense
280
Dec. 22
Dec. 26
Dec. 28
3,000
28,000
800
1,000
280
2
GENERAL JOURNAL DATE Dec. 31
Dec. 31
Dec. 31
Dec. 31
TITLES AND EXPLANATION
DEBIT
Cash s Payable Service Revenue Performed services collected cash and credit.
17,500 2,700
Salaries expense Rent Expense Cash Paid cash expenses
3,600 700
Cash Unearned revenue Collected cash for future services.
1,440
Williamson, withdrawals Cash Owner Withdrawal
3,000
CREDIT
20,200
4,300
1,440
3,000
3
GENERAL LEDGER
Cash
50,000
10,800
28,000
4,500
17,500 1,440
s Receivable
Office Supplies
Prepaid Insurance
2,700
4,500
3,000
18,000 800 1,000 &
280
4,300 & 3,000
Equipment 10,800 1,000
Accumulated Depreciation – Equip.
s Payable
18,000
3,000
Utilities Payable
Land
Interest Payable
Unearned Revenue
Notes Payable-Williamson
1,440
28,000
Capital-Williamson 50,000
Withdrawals
Service Revenue
3,000
20,200
4
Salaries Expense 3,600
Rent Expense 700
Insurance Expense
Utilities Expense
Advertising Expense
280
Supplies Expense
800
Interest Expense
Depreciation Exp. Equip.
5
Income Summary
Unadjusted Trial Balance Williamson Quality Automotive Unadjusted Trial Balance Month End December 31st
Debits Cash Office Supplies Prepaid Insurance Equipment Land s Payable Rent Expense Unearned revenue
Credits
$54,260 3,000 4,500 10,800 18,000 2000 800 1,440 28,000 50,000
Notes Payable-Williamson Capital - Capital-Williamson Williamson (Withdrawals) Service Revenue Salaries expense Advertising Expense Utilities expense s Receivable Total
3,000 20,200 3,600 800 280 2700 $101,920 $101,920
6
Adjusted Trial Balance Williamson Quality Automotive Adjusted Trial Balance Month End December 31st
Debits Cash Office Supplies Prepaid Insurance Accumulated Depreciation - Insurance Equipment Accumulated Depreciation – Equipment Land s Payable Unearned revenue
Credits
$54,260 2,400 4,500 500 10,800 180 18,000 2,000 1,440 28,000 50,000
Notes Payable-Williamson Capital - Capital-Williamson Williamson (Withdrawals) Service Revenue Rent Expense Salaries expense Advertising Expense Utilities expense s Receivable Depreciation Expense - Insurance Depreciation Expense – Equipment -Supplies Expense Interest Expense Total
3,000 20,200 800 3,600 800 280 2700 500 180 600 75 $102,175 $102,175
7
Income Statement
Williamson Quality Automotive Income Statement Month End December 31st
Revenues: Service Revenue
20,200
Expenses: Salaries expense Advertising Expense Utilities expense s Receivable Depreciation Expense - Insurance Depreciation Expense – Equipment Supplies Expense Interest Expense Rent Expense Total Expenses Net Income
3,600 800 280 2700 500 180 600 75 800 $9,535 $10,665
Statement of Changes in Owner’s Equity Williamson Quality Automotive Owners Equity Month End December 31st
Williamson Capital December 1 Owner Contribution Net Income for the month
0 50,000 10,665 60,665 (3,000) $57,665
Owner Withdrawal Williamson Capital December 31
8
Balance Sheet Williamson Quality Automotive Balance Sheet Month End December 31st
Assets Cash Office Supplies Prepaid Insurance Accum. Dep. – Insurance Land Equipment Accum. Dep. – Equipment Total Assets
$54,260 2,400 4,500 (500) 18,000 10,800 (180) $89,280
Liabilities s Payable 2,000 Unearned revenue Notes Payable-Williamson
1,440 28,000 5 0
Total Liabilities $31,440
Owner’s Equity Williamson Capital Total Liabilities & Owners Equity
9
$57,665 $89,280
Post-Closing Trial Balance Williamson Quality Automotive Post-Closing Trial Balance Month End December 31st
Debits Cash Office Supplies Prepaid Insurance Accumulated Depreciation - Insurance Equipment Accumulated Depreciation – Equipment Land s Payable Unearned revenue
Credits
$54,260 2,400 4,500 500 10,800 180 18,000
Notes Payable-Williamson Capital - Capital-Williamson Total:
$92,440
10
2,000 1,440 28,000 50,000 $92,440
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