Part A
The following account balances pertain to the Jasper Manufacturing Co. at December 31, 20X3 (before adjusting entries).
Debit
Credit
Cash ................................................................................
$300,000
Prepaid Insurance .............................................................
50,000
Land ................................................................................
400,000
Accounts Payable .............................................................
30,000
Common Stock .................................................................
250,000
Retained Earnings .............................................................
150,000
Service Revenue ...............................................................
650,000
Wages Expense .................................................................
150,000
Rent Expense ...................................................................
180,000
Total ................................................................................
$1,080,000
$1,080,000
Additional information:
(a)
Prepaid insurance in the trial balance represents an advance payment for 5 months of insurance made on November 1, 20X3.
(b)
In July, the accountant debited accounts payable for a $10,000 fine for a pollution violation; âEnvironmental Expenseâ should have been debited.
(c)
Rent expense in the trial balance represents an advance payment for 6 months rent paid on October 1, 20X3. The Company begins occupying the property on that date.
(d)
Unpaid and unrecorded wages earned by employees at December 31, 20X3, were
$60,000.
(e)
Accrue income taxes for 20X3 at 30% on pretax income.
Required:
(1) Prepare adjusting entries to Jasper Co.'s accounts at December 31, 20X3. Each entry should be made in general journal format. Identify each entry by using the letter of the paragraph containing the additional information for the entry.
(2) Prepare the current year income statement
(3) Prepare the current year balance sheet.
(4) Prepare the closing entries.
Part A
The following account balances pertain to the Jasper Manufacturing Co. at December 31, 20X3 (before adjusting entries).
| Debit | Credit | |
| Cash ................................................................................ | $300,000 | |
| Prepaid Insurance ............................................................. | 50,000 | |
| Land ................................................................................ | 400,000 | |
| Accounts Payable ............................................................. | 30,000 | |
| Common Stock ................................................................. | 250,000 | |
| Retained Earnings ............................................................. | 150,000 | |
| Service Revenue ............................................................... | 650,000 | |
| Wages Expense ................................................................. | 150,000 | |
| Rent Expense ................................................................... | 180,000 |
|
| Total ................................................................................ | $1,080,000 | $1,080,000 |
Additional information:
| (a) | Prepaid insurance in the trial balance represents an advance payment for 5 months of insurance made on November 1, 20X3. |
| (b) | In July, the accountant debited accounts payable for a $10,000 fine for a pollution violation; âEnvironmental Expenseâ should have been debited. |
| (c) | Rent expense in the trial balance represents an advance payment for 6 months rent paid on October 1, 20X3. The Company begins occupying the property on that date. |
| (d) | Unpaid and unrecorded wages earned by employees at December 31, 20X3, were $60,000. |
| (e) | Accrue income taxes for 20X3 at 30% on pretax income. |
Required:
(1) Prepare adjusting entries to Jasper Co.'s accounts at December 31, 20X3. Each entry should be made in general journal format. Identify each entry by using the letter of the paragraph containing the additional information for the entry.
(2) Prepare the current year income statement
(3) Prepare the current year balance sheet.
(4) Prepare the closing entries.
Related questions
The adjusted trial balance for China Tea Company at December 31,2013, is presented below:
Debit | Credit | |
Cash | 10,500 | |
Accounts receivable | 150,000 | |
Prepaid rent | 5,000 | |
Inventory | 25,000 | |
Equipment | 300,000 | |
Accumulated depreciation-equipment | 125,000 | |
Accounts payable | 30,000 | |
Notes payable-due in three months | 30,000 | |
Salaries payable | 4,000 | |
Interest payable | 1,000 | |
Capital stock | 200,000 | |
Retained earnings | 50,000 | |
Sales Revenue | 400,000 | |
Cost of goods sold | 180,000 | |
Salaries expense | 120,000 | |
Rent expense | 15,000 | |
Depreciation expense | 30,000 | |
Interest expense | 2,000 | |
Advertising expense | 2,500 | |
Totals | 840,000 | 840,000 |
| Prepare the closing entries for China Tea Company for the yearended December 31, 2013. |
| REM Consulting iscompleting its accounting processing at the end of the fiscal year,December 31. The following trial balances are available. | ||||||||
| âAccounts | Unadjusted | Adjustments | Adjusted | |||||
| Trial Balance | Trial Balance | |||||||
| Debit | Credit | Debit | Credit | Debit | Credit | |||
| Cash | 13,000 | 13,000 | ||||||
| Accounts Receivable | 1,500 | 1,800 | ||||||
| Prepaid Insurance | 600 | 200 | ||||||
| Supplies | 3,800 | 3,000 | ||||||
| Land | 25,000 | 25,000 | ||||||
| Machines | 30,000 | 30,000 | ||||||
| Accumulated Depreciation | 12,000 | 17,500 | ||||||
| Trademarks | 50,000 | 50,000 | ||||||
| Wages Payable | 900 | |||||||
| Unearned Revenue | 6,700 | 6,500 | ||||||
| Common Stock | 24,000 | 24,000 | ||||||
| Paid-in Capital | 60,000 | 60,000 | ||||||
| Retained Earnings | 15,000 | 15,000 | ||||||
| Dividends | 4,800 | 4,800 | ||||||
| Service Revenue | 25,000 | 25,500 | ||||||
| Wages Expense | 14,000 | 14,900 | ||||||
| Insurance Expense | 400 | |||||||
| Supplies Expense | 800 | |||||||
| Depreciation Expense | 5,500 | |||||||
| 142,700 | 142,700 | - | - | 149,400 | 149,400 | |||
| â | ||||||||
| â (a) Reconstruct the adjusting entries and givea brief explanation of each. | ||||||||
| Prepare an IncomeStatement for REM Consulting based on this information | ||||||||
| Prepare a BalanceSheet for REM Consulting based on this information | ||||||||
John's Cleaning Services, Inc. has the following adjustedaccount balances as of March 31, 2015. Prepare a classified balancesheet as of that date.
| Account | Debit | Credit |
| Cash | $600 | |
| Common Stock | 31,650 | |
| Inventory | 2,000 | |
| Prepaid Rent | 4,400 | |
| Building | 50,000 | |
| Salaries Expense | 1,000 | |
| Long-Term Investments | 50,500 | |
| Accounts Payable | 6,000 | |
| Rent Expense | 1,000 | |
| Income Tax Payable | 15,630 | |
| Long-Term Notes Payable | 8,000 | |
| Accumulated Depreciation- Building | 7,500 | |
| Retained Earnings | 2,520 | |
| Service Revenue | 41,000 | |
| Short-Term Investments | 1,800 | |
| Insurance Expense | 2,000 | |
| Current Portion of Long-Term Note Payable | 2,500 | |
| Depreciation Expense- Building | 1,500 | |
| Totals | $114,800 | $114,800 |
Account | Debit | Credit |
Cash | $600 | |
Short-Term Investments | 1,800 | |
Inventory | 2,000 | |
Prepaid Rent | 2,900 | |
Prepaid Insurance | 1,500 | |
Building | 50,000 | |
Accumulated DepreciationâBuilding | $7,500 | |
Long-Term Investments | 23,000 | |
Goodwill | 20,000 | |
Patent | 7,500 | |
Accounts Payable | 6,000 | |
Current Portion of Long-term Note Payable | 2,500 | |
Income Tax Payable | 15,630 | |
Long-term Notes Payable | 8,000 | |
Common Stock | 1,650 | |
Additional Paid-in Capital | 30,000 | |
Retained Earnings | 2,520 | |
Service Revenue | 41,000 | |
Rent Expense | 1,000 | |
Insurance Expense | 2,000 | |
Salaries Expense | 1,000 | |
Depreciation ExpenseâBuilding | 1,500 | _______ |
Totals | $114,800 | $114,800 |
