Balance Sheet Preparation Problem

Balance in all the accounts after adjustment are as follows: (all gures in Tk.) Cash 71,1!" #ccounts $ecei%a&le 1,7'!" and !,!!!" #ccounts *a+a&le 1,7'!" otes * a+a& le 1', !!!" Ca -ita l toc k '!,!!!" $ etai ned /a rni ngs '0,7!!" er% ice $ e%en ue !,'!!" #d%ertising e2-ense1,!!! " alaries e2-enses ,!!!" 3tilit+ e2-enses ,1!!" $e nt e2-en ses 01,!!!" su- -li es e2-en ses ,'!" $e-a irs e2-en ses 1,'!!" /nt ert ai nment e2-enses 7!" 4nterest recei%a&le ,!!!" 4nterest e2-ense 1,0'!" 4nterest -a+a&le 1,!'!. $e5uired: a. *r e-a re T ria l Bal ance &. *r e-ar e an income statement and a classi ed Balance sheet. c. *re-a re the closing entries as the+ would a--ear in the journal Cart er6s $e-air er%ices is owned and o-erated &+ Carl Carter . Carter -r o%ides re-air ser%ices to indi%iduals who -a+ fees against the ser%ices. The rm6s unadjusted trial &alance a--ears as follows: Carter6s $e-airs 3nadjusted Trial Balance ecem&er 01, !!8 e&it Credit Cash 9 0,!!! ;ce u--lies 0,!! *re-aid 4nsurance ,'! /5ui-ment <,!!! #ccount *a+a&le 1,!!! Carl Carter, Ca-ital 0!,!!! Carl Carter, =ithdrawals 1',!!! $e-air >ees /arned 77,7'! =ages /2-ense 0,!!! $ent /2-ense 8,!! 3tilities e2-ense 17!! T otals 118,7'! 118,7'! $e5uired: 1. *re-are adjusted Trial Balance using this informati on: i. #n in% entor + of the o;ce su- -lie s at the en d of the +e ar sho wed tha t 9!! of su--lies on hand. ii. The cost of e 2-ir ed insurance co% erag e was 9!! iii. The de-r ecia tion of the e5ui-me nt was cal cula ted esti mati ng a life of the e5ui-ment as 1! +ears. o al%age %alue was considered. The e5ui-ment was &ought on ?anuar+ 1, !!0. i%. The earned &ut u n-a id wage s at the end of t he + ear were 9!! . 3s e th e in forma ti on in the adj us ted tr ia l &a la nce to -re-are an inc ome statement and a Balance Sheet. 0. *re-are the closing entries as the+ would a--ear in the journal

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Transcript of Balance Sheet Preparation Problem

7/18/2019 Balance Sheet Preparation Problem

http://slidepdf.com/reader/full/balance-sheet-preparation-problem 1/2

Balance in all the accounts after adjustment are as follows: (all gures in Tk.)

Cash 71,1!" #ccounts $ecei%a&le 1,7'!" and !,!!!" #ccounts *a+a&le 1,7'!" otes*a+a&le 1',!!!" Ca-ital tock '!,!!!" $etained /arnings '0,7!!" er%ice $e%enue!,'!!" #d%ertising e2-ense1,!!!" alaries e2-enses ,!!!" 3tilit+ e2-enses ,1!!" $ente2-enses 01,!!!" su--lies e2-enses ,'!" $e-airs e2-enses 1,'!!" /ntertainment

e2-enses 7!" 4nterest recei%a&le ,!!!" 4nterest e2-ense 1,0'!" 4nterest -a+a&le 1,!'!.

$e5uired:a. *re-are Trial Balance

&. *re-are an income statement and a classied Balance sheet.c. *re-are the closing entries as the+ would a--ear in the journal

Carter6s $e-air er%ices is owned and o-erated &+ Carl Carter. Carter -ro%ides re-air ser%ices toindi%iduals who -a+ fees against the ser%ices. The rm6s unadjusted trial &alance a--ears as follows:

Carter6s $e-airs

3nadjusted Trial Balanceecem&er 01, !!8

e&it CreditCash 9 0,!!!;ce u--lies 0,!!*re-aid 4nsurance ,'!/5ui-ment <,!!!#ccount *a+a&le 1,!!!Carl Carter, Ca-ital 0!,!!!Carl Carter, =ithdrawals 1',!!!$e-air >ees /arned 77,7'!=ages /2-ense 0,!!!$ent /2-ense 8,!!3tilities e2-ense 17!!

Totals 118,7'! 118,7'!

$e5uired:

1. *re-are adjusted Trial Balance using this information:i. #n in%entor+ of the o;ce su--lies at the end of the +ear showed that

9!! of su--lies on hand.ii. The cost of e2-ired insurance co%erage was 9!!iii. The de-reciation of the e5ui-ment was calculated estimating a life of

the e5ui-ment as 1! +ears. o al%age %alue was considered. Thee5ui-ment was &ought on ?anuar+ 1, !!0.

i%. The earned &ut un-aid wages at the end of the +ear were 9!!. 3se the information in the adjusted trial &alance to -re-are an income

statement and a Balance Sheet.0. *re-are the closing entries as the+ would a--ear in the journal