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Chapter 3: Q21E (page 136)

(L09) (Worksheet) Presented below are the selected accounts for Alvarez Company as reported in the worksheet at the end of May 2017.

ALVAREZ CO.

Worksheet

For The Month Ended May 31, 2017

Adjusted

Trial Balance

Income

Statement

Balance

Sheet

Accounts Titles

Dr.

Cr.

Dr.

Cr.

Dr.

Cr.

Cash

9,000

Inventory

80,000

Sales Revenue

450,000

Sales returns and allowances

10,000

Sales Discounts

5,000

Cost of Goods Sold

250,000

Instructions:

Complete the worksheet by extending the amounts reported in the adjusted trial balance to the appropriate columns in the worksheet. Do not total individual columns.

Short Answer

Expert verified

Cash (Balance sheet) =Dr.9,000

Inventory (Balance sheet) = Dr.80,000

Sales Revenue (Income Statement) = Cr.450,000

Sales Returns and Allowances (Income Statement) = Dr. 10,000

Sales Discount (Income Statement) = Dr.5,000

Cost of Goods Sold (Income Statement) = Dr.250,000

Step by step solution

01

Meaning of Balance Sheet

The term balance sheet represents the financial position of a company using various resources, liabilities, and owner's equity. It shows all the items briefly for a better understanding of the financial position.

02

Worksheet presentation

The worksheet for the month ended May 31, 2017, is as follows:

ALVAREZ CO.

Worksheet

For the Month Ended May 31, 2017

Adjusted Trial balance

Income

Statement
Balance Sheet

Account Titles

Dr.

Cr.

Dr.

Cr.

Dr.

Cr.

Cash

9,000

-------

------

-------

9,000

------

Inventory

80,000

-------

------

-------

80,000

------

Sales Revenue

------

450,000

------

450,000

-------

------

Sales Returns and Allowances

10,000

------

10,000

-------

-------

------

Sales Discount

5,000

------

5,000

-------

-------

------

Cost of Goods Sold

250,000

------

250,000

-------

-------

------

Note: Sales returns and allowances may also be shown as deductions from sales revenues.

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Most popular questions from this chapter

E3-6 (L03) (Adjusting Entries) Karen Weller, D.D.S., opened a dental practice on January 1, 2017. During the first month ofoperations, the following transactions occurred.1. Performed services for patients who had dental plan insurance. At January 31, \(750 of such services was performed but notyet billed to the insurance companies.2. Utility expenses incurred but not paid prior to January 31 totaled \)520.3. Purchased dental equipment on January 1 for \(80,000, paying \)20,000 in cash and signing a \(60,000, 3-year note payable.The equipment depreciates \)400 per month. Interest is \(500 per month.4. Purchased a one-year malpractice insurance policy on January 1 for \)12,000.5. Purchased \(1,600 of dental supplies. On January 31, determined that \)500 of supplies were on hand.InstructionsPrepare the adjusting entries on January 31. (Omit explanations.) Account titles are Accumulated Depreciation—Equipment,Depreciation Expense, Service Revenue, Accounts Receivable, Insurance Expense, Interest Expense, Interest Payable, PrepaidInsurance, Supplies, Supplies Expense, Utilities Expenses, and Accounts Payable.

The following are the trial balance and the other information related to Yorkis Perez, a consulting engineer.

YORKIS PEREZ, CONSULTING ENGINEER .
TRIAL BALANCE
DECEMBER 31, 2017

Debit

Credit

Cash

\( 29,500

Accounts Receivable

49,600

Allowance for Doubtful Accounts

\) 750

Supplies

1,960

Prepaid Insurance

1,100

Equipment

25,000

Accumulated Depreciation—Equipment

6,250

Notes Payable

7,200

Owner’s Capital

35,010

Service Revenue

100,000

Rent Expense

9,750

Salaries and Wages Expense

30,500

Utilities Expenses

1,080

Office Expense

720

\(149,210

\)149,210

  1. Fees received in advance from clients \(6,000, which were recorded as revenue.
  2. Services performed for clients that were not recorded by December 31, \)4,900.
  3. Bad debt expense for the year is \(1,430.
  4. Insurance expired during the year \)480.
  5. Equipment is being depreciated at 10% per year.
  6. Yorkis Perez gave the bank a 90-day, 10% note for \(7,200 on December 1, 2017.
  7. Rent of the building is \)750 per month. The rent for 2017 has been paid, as has that for January 2018, and recorded as Rent Expense.
  8. Office salaries and wages earned but unpaid December 31, 2017, \(2,510.

Instructions

  1. From the trial balance and other information given, prepare annual adjusting entries as of December 31, 2017. (Omit explanations.)
  2. Prepare an income statement for 2017, a statement of owner’s equity, and a classified balance sheet. Yorkis Perez withdrew \)17,000 cash for personal use during the year.

BE3-11 (L04) Side Kicks has year-end account balances of Sales Revenue \(808,900, Interest Revenue \)13,500, Cost of Goods Sold \(556,200, Administrative Expenses \)189,000, Income Tax Expense \(35,100, and Dividends \)18,900. Prepare the year-end closing entries

Rolling Hills Golf Inc. was organized on July 1, 2017. Quarterly financial statements are prepared. The unadjusted trial balance and adjusted trial balance on September 30 are shown below.

ROLLING HILLS GOLF INC.TRIAL BALANCESEPTEMBER 30, 2017


Unadjusted
Adjusted

Dr.

Cr.

Dr.

Cr.

Cash

\( 6,700

\) 6,700

Accounts Receivable

400

1,000

Prepaid Rent

1,800

900

Supplies

1,200

180

Equipment

15,000

15,000

Accumulated Depreciation—Equipment

\( 350

Notes Payable

\) 5,000

5,000

Accounts Payable

1,070

1,070

Salaries and Wages Payable

600

Interest Payable

50

Unearned Rent Revenue

1,000

800

Common Stock

14,000

14,000

Retained Earnings

0

0

Dividends

600

600

Service Revenue

14,100

14,700

Rent Revenue

700

900

Salaries and Wages Expense

8,800

9,400

Salaries and Wages Expense

900

1,800

Rent Expense

350

Depreciation Expense

1,020

Supplies Expense

470

Utilities Expenses

50

Interest Expense

\(35,870

\)35,870

\(37,470

\)37,470

Instructions

  1. Journalize the adjusting entries that were made.
  2. Prepare an income statement and a retained earnings statement for the 3 months ending September 30 and a classified balance sheet at September 30.
  3. Identify which accounts should be closed on September 30.
  4. If the note bears interest at 12%, how many months has it been outstanding?

E3-3 (L02) (Corrected Trial Balance) The following trial balance of Blues Traveler Corporation does not balance.

BLUES TRAVELER CORPORATION

TRIAL BALANCE

APRIL 30, 2017
Debit Credit

Cash \( 5,912Accounts Receivable 5,240Supplies 2,967Equipment 6,100Accounts Payable \) 7,044Common Stock 8,000Retained Earnings 2,000Service Revenue 5,200Office Expense 4,320

Total \(24,539 \)22,244

An examination of the ledger shows these errors.1. Cash received from a customer on account was recorded (both debit and credit) as \(1,380 instead of \)1,830.2. The purchase on account of a computer costing \(3,200 was recorded as a debit to Office Expense and a credit to AccountsPayable.3. Services were performed on account for a client, \)2,250, for which Accounts Receivable was debited \(2,250 and ServiceRevenue was credited \)225.4. A payment of \(95 for telephone charges was entered as a debit to Office Expense and a debit to Cash.5. The Service Revenue account was totaled at \)5,200 instead of $5,280.InstructionsFrom this information prepare a corrected trial balance.
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