Goldsmith Company's adjusted trial balance on December 31, 2011, follows.

Required

1. Prepare an income statement and a statement of retained earnings for the year 2011, and a classified balance sheet as of December 31, 2011.

2. Enter the adjusted trial balance in the first two columns of a six-column table. Use the middle two columns for closing entry information and the last two columns for a post-closing trial balance-see the headings below. Insert an Income Summary account as the last row in the trial balance.

3. Enter closing entry information in the six-column table and prepare journal entries for them.

Analysis Component

4. Assume for this part only that:

a. None of the $1,000 insurance expense had expired during the year. Instead, assume it is a pre- payment of the next period's insurance protection.

b. There are no earned and unpaid wages at the end of the year. (Reverse the $1,300 wages payable accrual.)
Describe the financial statement changes that would result from these two assumptions.

Transcribed Image Text:

GOLDSMITH COMPANY Adjusted Trial Balance December 31, 2011 No. Account Title Debit Credit $ 10,300 1,400 2,200 ....52,000 0 Cash 125 Store supplies 167 Equipment.. $ 9.000 17,000 ,300 13,200 20,200 201 Accounts payable. 210 Wages payable 318 Retained earnings... 319 Dividends 401 Repair fees earned 612 Depreciation expense-Equipment.. 623 Wages expense 637 Insurance expense 16,500 91,500 8,500 41,500 1,000 I1,400 4,400 3,000 $152,200 .. 65 Store supplies expense Totals $152,200 Post-Closing Trial Balance Closing Entries Adjusted Trial Balance Information Cr. Dr. Cr. Dr. Cr No. Account Title Dr