Recessive Interiors Unadjusted Trial Balance January 31, 2019 Debit Balances Credit Balances Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 13,100 Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 8,000
Prepaid Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 7,500 Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 113,000 Accumulated Depreciation Equipment. . . . . . . . . . . . . . . . . . . . . . . . . 17 12,000 Trucks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 90,000 Accumulated Depreciation—Trucks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 27,100 Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 4,500 Jeanne McQuay, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 126,400 Jeanne McQuay, Drawing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 3,000 Service Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 155,000 Wages Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 72,000 Rent Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 7,600
Truck Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 5,350 Miscellaneous Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 5,450 325,000 325,000
The data needed to determine year-end adjustments are as follows:
a. Supplies on hand at January 31 are $2,850.
b. Insurance premiums expired during the year are $3,150.
c. Depreciation of equipment during the year is $5,250.
d. Depreciation of trucks during the year is $4,000.
e. Wages accrued but not paid at January 31 are $900.
Instructions
1. For each account listed in the unadjusted trial balance, enter the balance in the appropriate Balance column of a four-column account and place a check mark (✓) in the Posting Reference column.
2. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. Add the accounts listed in part (3) as needed.
3. Journalize and post the adjusting entries, inserting balances in the accounts affected.
Record the adjusting entries on Page 26 of the journal. The following additional accounts from Recessive Interiors’ chart of accounts should be used: Wages Payable, 22; Depreciation Expense—Equipment, 54; Supplies Expense, 55; Depreciation Expense—Trucks, 56; Insurance Expense, 57.
4. Prepare an adjusted trial balance.
5. Prepare an income statement, a statement of owner’s equity (no additional investments were made during the year), and a balance sheet.
6. Journalize and post the closing entries. Record the closing entries on Page 27 of the journal. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry.
7. Prepare a post-closing trial balance.
Answer:
1., 3., and 6.
Account No. 11
Post.
Item Ref. Debit Credit Debit Credit
2019
Jan. 31 Balance 13,100
Account No. 13
Post.
Item Ref. Debit Credit Debit Credit
2019
Jan. 31 Balance 8,000
31 Adjusting 26 5,150 2,850
Account No. 14
Post.
Item Ref. Debit Credit Debit Credit
2019
Jan. 31 Balance 7,500
31 Adjusting 26 3,150 4,350
Account No. 16
Post.
Item Ref. Debit Credit Debit Credit
2019
Jan. 31 Balance 113,000
Account No. 17
Post.
Item Ref. Debit Credit Debit Credit
2019
Jan. 31 Balance 12,000
31 Adjusting 26 5,250 17,250
Account No. 18
Post.
Item Ref. Debit Credit Debit Credit
2019
Jan. 31 Balance 90,000
Post.
Item Ref. Debit Credit Debit Credit
2019
Jan. 31 Balance 27,100
31 Adjusting 26 4,000 31,100
Post.
Item Ref. Debit Credit Debit Credit
2019
Jan. 31 Balance 4,500
Post.
Item Ref. Debit Credit Debit Credit
2019
Jan. 31 Adjusting 26 900 900
Post.
Item Ref. Debit Credit Debit Credit
2019
Jan. 31 Balance 126,400
31 Closing 27 46,150 172,550
31 Closing 27 3,000 169,550
Post.
Item Ref. Debit Credit Debit Credit
2019
Jan. 31 Balance 3,000
31 Closing 27 3,000
Post.
Item Ref. Debit Credit Debit Credit
2019
Jan. 31 Balance 155,000
31 Closing 27 155,000 — —
Post.
Item Ref. Debit Credit Debit Credit
2019
Jan. 31 Balance 72,000
31 Adjusting 26 900 72,900
31 Closing 27 72,900 — —
Post.
Item Ref. Debit Credit Debit Credit
2019
Jan. 31 Balance 7,600
31 Closing 27 7,600 — —
Post.
Item Ref. Debit Credit Debit Credit
2019
Jan. 31 Balance 5,350
31 Closing 27 5,350
Post.
Item Ref. Debit Credit Debit Credit
2019
Jan. 31 Adjusting 26 5,250 5,250
31 Closing 27 5,250 — —
Post.
Item Ref. Debit Credit Debit Credit
2019
Jan. 31 Adjusting 26 5,150 5,150
31 Closing 27 5,150 — —
Post.
Item Ref. Debit Credit Debit Credit
2019
Jan. 31 Adjusting 26 4,000 4,000
31 Closing 27 4,000 — —
Post.
Item Ref. Debit Credit Debit Credit
2019
Jan. 31 Adjusting 26 3,150 3,150
31 Closing 27 3,150 — —
Post.
Item Ref. Debit Credit Debit Credit
2019
Jan. 31 Balance 5,450
31 Closing 27 5,450
2. Optional (Appendix)
Account Title Debit Credit Debit Credit Debit Credit Debit Credit
Cash 13,10013,10013,100
Supplies 8,000(a) 5,150 2,8502,850
Prepaid Insurance 7,500(b) 3,150 4,3504,350
Equipment 113,000113,000113,000
Accum. Depr.—Equipment 12,000 (c) 5,250 17,25017,250
Trucks 90,00090,00090,000
Accum. Depr.—Trucks 27,100 (d) 4,000 31,10031,100
Accounts Payable4,5004,5004,500
Wages Payable(e) 900 900900
Jeanne McQuay, Capital 126,400126,400126,400
Jeanne McQuay, Drawing 3,0003,0003,000
Service Revenue155,000155,000 155,000
Wages Expense 72,000 (e) 900 72,900 72,900
Rent Expense 7,6007,600 7,600
Truck Expense 5,3505,350 5,350
Depr. Exp.—Equipment (c) 5,250 5,250 5,250
Supplies Expense(a) 5,150 5,150 5,150
Depr. Exp.—Trucks(d) 4,000 4,000 4,000
Insurance Expense(b) 3,150 3,150 3,150
Miscellaneous Expense 5,4505,450 5,450
325,000 325,000 18,450 18,450 335,150 335,150 108,850 155,000 226,300 180,150
Net income46,15046,150
155,000 155,000 226,300 226,300
3.Page 26
Post.
Ref. Debit Credit
2019
Jan. 31 Supplies Expense 55 5,150
Supplies13 5,150
Supplies used ($8,000 – $2,850).
31 Insurance Expense 57 3,150
Prepaid Insurance 14 3,150
Insurance expired.
31 Depreciation Expense—Equipment 54 5,250
Accumulated Depr.—Equipment 17 5,250
Equipment depreciation.
31 Depreciation Expense—Trucks 56 4,000
Accumulated Depr.—Trucks 19 4,000
Truck depreciation.
31 Wages Expense51 900
Wages Payable 22 900
Accrued wages.
4.
Account Debit Credit
No. Balances Balances
Cash11 13,100
Supplies13 2,850
Prepaid Insurance14 4,350
Equipment16 113,000
Accumulated Depreciation—Equipment 17 17,250
Trucks18 90,000
Accumulated Depreciation—Trucks 19 31,100
Accounts Payable21 4,500
Wages Payable22 900
Jeanne McQuay, Capital 31 126,400
Jeanne McQuay, Drawing 32 3,000
Service Revenue41 155,000
Wages Expense51 72,900
Rent Expense52 7,600
Truck Expense53 5,350
Depreciation Expense—Equipment 54 5,250
Supplies Expense55 5,150
Depreciation Expense—Trucks 56 4,000
Insurance Expense57 3,150
Miscellaneous Expense 59 5,450
335,150 335,150
5.
Service revenue$155,000
Expenses:
Wages expense$72,900
Rent expense7,600
Truck expense5,350
Depreciation expense—equipment 5,250
Supplies expense5,150
Depreciation expense—trucks4,000
Insurance expense3,150
Miscellaneous expense5,450
Total expenses108,850
Net income$ 46,150
Jeanne McQuay, capital, February 1, 2018$126,400
Net income for the year$46,150
Withdrawals(3,000)
Increase in owner’s equity43,150
Jeanne McQuay, capital, January 31, 2019$169,550
RECESSIVE INTERIORS
Balance Sheet
January 31, 2019
Assets
Current assets:
Cash$13,100
Supplies2,850
Prepaid insurance4,350
Total current assets$ 20,300
Property, plant, and equipment:
Equipment$113,000
Less accumulated depreciation 17,250 $95,750
Trucks$ 90,000
Less accumulated depreciation 31,100 58,900
Total property, plant, and equipment154,650
Total assets$174,950
Current liabilities:
Accounts payable$ 4,500
Wages payable900
Total liabilities$ 5,400
Jeanne McQuay, capital169,550
Total liabilities and owner’s equity$174,950
6.Page 27
Post.
Ref. Debit Credit
2019
Jan. 31 Service Revenue 41 155,000
Wages Expense 51 72,900
Rent Expense 52 7,600
Truck Expense 53 5,350
Depreciation Expense—Equipment 54 5,250
Supplies Expense 55 5,150
Depreciation Expense—Trucks 56 4,000
Insurance Expense 57 3,150
Miscellaneous Expense 59 5,450
Jeanne McQuay, Capital 31 46,150
31 Jeanne McQuay, Capital 31 3,000
Jeanne McQuay, Drawing 32 3,000
7.
Acccount Debit Credit
No. Balances Balances
Cash11 13,100
Supplies13 2,850
Prepaid Insurance14 4,350
Equipment16 113,000
Accumulated Depreciation—Equipment 17 17,250
Trucks18 90,000
Accumulated Depreciation—Trucks 19 31,100
Accounts Payable21 4,500
Wages Payable22 900
Jeanne McQuay, Capital 31 169,550
223,300 223,300