The following unadjusted trial balance is for Crush Demolition Company as of the end of its April 30, 2005, fiscal year. The April 30, 2004, credit balance of the owner’s capital account was \($36,900,\) and the owner invested \($30,000\) cash in the company during the 2005 fiscal year.

Required I. Prepare a 10-column work sheet for fiscal year 2005, starting with the unadjusted trial balance and including adjustments based on these additional facts:

a. The supplies available at the end of fiscal year 2005 had a cost of \($8,100.

b. The cost of expired insurance for the fiscal year is \($11,500\).

c. Annual depreciation on equipment is \($18,000\).

d.\) The April utilities expense of \($700\) is not included in the unadjusted trial balance because the bill arrived after the trial balance was prepared. The \($700\) amount owed needs to be recorded.

e. The company’s employees have earned \($2,200\) of accrued wages at fiscal year-end.

f. The rent expense incurred and not yet paid or recorded at fiscal year-end is \($5,360\).
g. Additional property taxes of \($450\) have been assessed for this fiscal year but have not been paid or recorded in the accounts.
h. The long-term note payable bears interest at 1% per month. The unadjusted Interest Expense account equals the amount paid for the first 11 months of the 2005 fiscal year. The \($200\) accrued interest for April has not yet been paid or recorded. (Note that the company is required to make a \($4,000\) payment toward the note payable during the 2006 fiscal year.)
1. Use the work sheet to enter the adjusting and closing entries; then journalize them.
3. Prepare the income statement and the statement of owner’s equity for the year ended April 30, and the classified balance sheet at April 30, 2005.
Analysis Component 4. Analyze the following separate 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. Assume the adjustment for expiration of the insurance coverage consisted of a credit to Prepaid Insurance for \($3,100\) and a debit for \($3,100\) to Insurance Expense.

b. When the adjusted trial balance in the work sheet is completed, the \($6,700\) Repairs Expense account balance is extended to the Debit column of the balance sheet columns.

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B C D CRUSH DEMOLITION COMPANY Unadjusted Trial Balance April 30, 2005 2 No. Account Title Debit Credit 3 101 Cash 4 126 Sury lies S 9,000 18.000 5 128 Pre aid insurance 6167 Equiment 7168 Accumulated der reciation-Equipment 8 201 Accounts payable 9203 Interest payable 10 208 Rent rayable 11210 Wages rayable 12 213 Property taxes nayable 13 251 Long-term notes payable 14 301 J. Bonair, Capital 14,000 140 000 S 10,000 16.000 0 0 0 0 20,000 66,900 15 302 J. Bonair, Withdrawals 24,000 16 401 Demolition fees earned 177,000 17 612 Depreciation expense-Equipment 0 18 623 Wages expense 51,400 19 633 Interest expense 2,200 20 637 Insurance expense 0 8,800 0 21 640 Rent expense 22 652 Supplies expense 23 683 Property taxes expense 24 684 Repairs expense 25 690 Utilities expense Totals 26 27 8,400 6,700 6,800 $ 289,900 $ 289,900 1013