Presented below is the unadjusted trial balance of Webster Demolition Company as of June 30, 2023, the end of its fiscal year. The owner invested $17,500 cash in the company during the year.

Required
Preparation Component:
1. Prepare a 10-column work sheet for 2023, starting with the unadjusted trial balance and including these additional facts:
a. The inventory of supplies at the end of the year had a cost of $6,800.
b. The cost of expired insurance for the year is $5,750.
c. Annual depreciation on the equipment is $8,700.
d. The June utilities expense of $375 was not included in the trial balance because the bill arrived after it was prepared. The $375 amount owed needs to be recorded.
e. The company’s employees have earned $1,100 of accrued wages.
f. Interest of $110 for June has not yet been paid or recorded. In addition, the company is required to make a $2,000 payment on the note on August 30, 2023.
2. Use the work sheet to journalize the adjusting and closing entries.
3. Prepare an income statement, a statement of changes in equity, and a classified balance sheet.

Analysis Component:
Analyze the following independent errors and describe how each would affect the 10-column work sheet. Explain whether the error is likely to be discovered in completing the work sheet and, if not, the effect of the error on the financial statements.
a. The adjustment for consumption of the insurance coverage credited the Prepaid Insurance account for $1,550 and debited the same amount to the Insurance Expense account.
b. When completing the adjusted trial balance in the work sheet, the $4,200 Repairs Expense account balance was extended to the Debit column for the balance sheet.

Transcribed Image Text:

E OD ONOGA W NH Webster Demolition Company Trial Balance.xlsx Home Insert Page Layout Formulas Data Review View P18 10 167 fx B Webster Demolition Company Unadjusted Trial Balance June 30, 2023 No. 7 101 Cash 8 126 Supplies 9 128 Prepaid insurance 15 251 16 301 A E Account Equipment 11 168 Accumulated depreciation, equipment 12 201 Accounts payable 13 203 Interest payable 14 210 Wages payable Long-term notes payable Rusty Webster, capital Rusty Webster, withdrawals 17 302 18 401 Demolition revenue 19 612 Depreciation expense, equipment 20 623 Wages expense 21 633 Interest expense 22 637 Insurance expense 23 640 24 652 25 683 26 684 Repairs expense 27 690 Utilities expense 28 Totals Rent expense Supplies expense Business tax expense $ Unadjusted Trial Balance Dr. 4,500 8,200 7,300 72,000 2,100 -O- 27,400 1,100 -O- 24,400 -O- 4,200 4,200 8,400 $ 163,800 $ C Cr. 5,000 9,100 -0- -O- 45,000 21,400 83,300 $ 163,800