The following unadjusted trial balance is for ACE CONSTRUCTION CO. as of the end
ID: 2425108 • Letter: T
Question
The following unadjusted trial balance is for ACE CONSTRUCTION CO. as of the end of its 2015 fiscal year. The June 30, 2014, credit balance of the owner’s capital account was $51,200, and the owner invested $29,000 cash in the company during the 2015 fiscal year.
ACE CONSTRUCTION CO.
Unadjusted Trial Balance
June 30, 2015
No.
Account Title
Debit
Credit
101
Cash
$
19,000
126
Supplies
8,000
128
Prepaid insurance
5,500
167
Equipment
145,570
168
Accumulated depreciation—Equipment
$ 23,000
201
Accounts payable
5,000
203
Interest payable
0
208
Rent payable
0
210
Wages payable
0
213
Property taxes payable
0
251
Long-term notes payable
23,000
301
V. Ace, Capital
80,200
302
V. Ace, Withdrawals
31,000
401
Construction fees earned
150,000
612
Depreciation expense—Equipment
0
623
Wages expense
43,000
633
Interest expense
2,530
637
Insurance expense
0
640
Rent expense
15,000
652
Supplies expense
0
683
Property taxes expense
5,000
684
Repairs expense
2,700
690
Utilities expense
3,900
Totals
$
281,200
$
281,200
Adjustments:
a.
The supplies available at the end of fiscal year 2015 had a cost of $2,880.
b.
The cost of expired insurance for the fiscal year is $3,465.
c.
Annual depreciation on equipment is $8,900.
d.
The June utilities expense of $520 is not included in the unadjusted trial balance because the bill arrived after the trial balance was prepared. The $520 amount owed needs to be recorded.
e.
The company’s employees have earned $1,500 of accrued wages at fiscal year-end.
f.
The rent expense incurred and not yet paid or recorded at fiscal year-end is $200.
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 2015 fiscal year. The $230 accrued interest for June has not yet been paid or recorded. (The company is required to make a $4,000 payment toward the note payable during the 2016 fiscal year.)
1.Prepare a 10-column work sheet for fiscal year 2015, starting with the unadjusted trial balance and including adjustments based on the additional facts.
2. Prepare the statement of owner's equity for the year ended June 30
3.Prepare the classified balance sheet at June 30, 2015.
ACE CONSTRUCTION CO.
Unadjusted Trial Balance
June 30, 2015
No.
Account Title
Debit
Credit
101
Cash
$
19,000
126
Supplies
8,000
128
Prepaid insurance
5,500
167
Equipment
145,570
168
Accumulated depreciation—Equipment
$ 23,000
201
Accounts payable
5,000
203
Interest payable
0
208
Rent payable
0
210
Wages payable
0
213
Property taxes payable
0
251
Long-term notes payable
23,000
301
V. Ace, Capital
80,200
302
V. Ace, Withdrawals
31,000
401
Construction fees earned
150,000
612
Depreciation expense—Equipment
0
623
Wages expense
43,000
633
Interest expense
2,530
637
Insurance expense
0
640
Rent expense
15,000
652
Supplies expense
0
683
Property taxes expense
5,000
684
Repairs expense
2,700
690
Utilities expense
3,900
Totals
$
281,200
$
281,200
Explanation / Answer
Particulars
Supplies
Cash
Pre.ins.
Equipment
Acc.dep
A/Cpay
LT notes pay
Opening
-
1,45,750
23,000
Addition
8,000
29,000
5,500
8,900
23000
Withdrawls
5,120
4,000
3,465
4,000
Closing Bal.
2,880
15,000*
2,035
145,570
31,900
8,450
19,000
*190,000-4,000=$15,000
Consumption=8,000-2,880=$5,120
b. Insurance expense= $5,500
Unexpired insurance= 5,500-3,465= 2,035
c. Annual dep. =$8,900
Unadjusted Acc. Dep.= $23,000
Adjusted acc. Dep.= $31,900
d. Utilities A/c Dr. 520
To A/c’s Payable 520
Utilities expenses= 3,900+520= 4,420
A/c Payable=5,000+520=5,520
e. Wages A/c Dr. 1,500
To A/c’s payable 1,500
Wages= 43,000+1,500=$44,500
A/c Payable= 5,520+1,500= $ 7,020
f. Rent A/c Dr. 200
To A/c’s Payable 200
Rent = 15,000+200=15,200
A/c’s Payable= 7,020+200=$7,220
g. Property Taxes Dr. 1,000
To A/c’s Payable 1,000
Property tax= 5,000+1,000=$6,000
A/C’s Payable= 7,220+1,000=$8,220
h. Interest Expenses Dr. 230
To A/c’s Payable 230
Interest Expenses= 2,530+230=$2,760
A/c’s Payable=8,220+230= $8,450
To Cash A/c 4,000
Profit & loss A/c
Particulars
Amount($)
Fees Earned
150,000
Less: Expenses
Wages
44,500
Interest
2,760
Insurance
3,465
Rent Expenses
15,200
Supplies Exp.
5,120
Property tax Expenses
6,000
Repairs Expenses
2,700
Utilities expenses
4,420
Depreciation
8,900
Profit
56,935
2. Statement of Owner’s Equity
Particulars
Amount(Rs.)
Opening Balance
51,200
Addition
29,000
Profit
56,935
Less:Withdrawls
31,000
Closing Balance
106,135
3. Balance Sheet
Particulars
Amount($)
Capital
106,135
Long term Notes Payable
19,000
Accounts Payable
8,450
Accumulated Depreciation
31,900
Total
165,485
Equipment
1,45,570
Supplies
2,880
Cash
15,000
Prepaid Insurance
2,035
Total
1,65,485
Particulars
Supplies
Cash
Pre.ins.
Equipment
Acc.dep
A/Cpay
LT notes pay
Opening
-
1,45,750
23,000
Addition
8,000
29,000
5,500
8,900
23000
Withdrawls
5,120
4,000
3,465
4,000
Closing Bal.
2,880
15,000*
2,035
145,570
31,900
8,450
19,000
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