Question
(12 points) Visit the homework-related module in Canvas and find the Excel spreadsheet for traditional homework item no. 14. The spreadsheet contains the unadjusted trial
(12 points) Visit the homework-related module in Canvas and find the Excel spreadsheet for traditional homework item no. 14. The spreadsheet contains the unadjusted trial balance for Acme Company for the year ended 12-31-16. Acme only prepares AJEs once each year as of year-end. Prepare the AJEs for the following situations:
Included in Acmes cash account is an interest-bearing checking account. As of 12-31-16, Acme had earned, but not yet recorded, $250 of interest income.
Acmes prepaid rent balance of $8,000 relates to Acmes January 2016 rent. During February, 2016 Acme paid $120,000 of rent for the period of February 1, 2016 to January 31, 2017. Acme recorded the payment in a temporary account.
As of 12-31-16, Acme had $1,000 of office supplies on hand (based on a physical count of its office supplies).
Acmes prepaid insurance balance of $4,200 relates to Acmes January through March 2016 insurance. During March, 2016 Acme paid $18,000 of insurance for the period of April 1, 2016 to March 31, 2017. Acme recorded the payment in a temporary account.
Acme calculated $26,000 of annual depreciation expense.
As of 12-31-16, Acme incurred, but did not yet pay, $11,000 of wage expense and $5,200 of utilities expense.
On 12-15-16, Acme received $15,000 from a customer for work Acme will perform during 2017.
Acmes note payable has been outstanding since November 1, 2016. Its a 4%, one-year note. The note requires Acme to pay interest every quarter with the first interest payment due on February 1, 2017.
Acmes income tax rate is 30%.
Post the necessary AJEs to the Excel spreadsheet.
Using formulas within the Excel spreadsheet, calculate the adjusted debit and credit balances for each account.
Using the adjusted account balances, prepare, in good form, Acmes income statement for the year ended 12-31-16 and Acmes balance sheet as of 12-31-16.
Traditional Homework Item no. 14 | ||||||
Acme Company | ||||||
12/31/16 | ||||||
| Unadjusted |
| Adjustments |
| Adjusted |
|
ACCOUNT | Debit | Credit | Debit | Credit | Debit | Credit |
Cash | $400,000 |
| $15,000 |
| $415,000 |
|
Accounts receivable | 243,000 |
|
|
| 243,000 |
|
Interest receivable | 0 |
| 250 |
| 250 |
|
Prepaid rent | 8,000 |
| 2,000 |
| 10,000 |
|
Prepaid office supplies | 1,500 |
|
| $500 | 1,000 |
|
Prepaid insurance | 4,200 |
| 300 |
| 4,500 |
|
Property, plant, and equipment | 626,000 |
|
|
| 626,000 |
|
Accumulated depreciation |
| $110,000 |
| 26,000 |
| $136,000 |
Notes payable |
| 50,000 |
|
|
| 50,000 |
Accrued wages payable |
| 0 |
| 11,000 |
| 11,000 |
Accrued utilities payable |
| 0 |
| 5,200 |
| 5,200 |
Accrued interest payable |
| 0 |
| 333 |
| 333 |
income taxes payable |
| 0 |
| 114,665 |
| 114,665 |
Unearned service revenue |
| 0 |
| 15,000 |
| 15,000 |
Common stock, $1 par value |
| 50,000 |
|
|
| 50,000 |
Additional paid-in-capital |
| 250,000 |
|
|
| 250,000 |
Retained earnings |
| 300,000 |
|
|
| 300,000 |
Service revenue |
| 1,288,700 |
|
|
| 1,288,000 |
Interest income |
| 0 |
| 250 |
| 250 |
Rent expense | 120,000 |
|
| 2,000 | 118,000 |
|
Office supplies expense | 6,000 |
| 500 |
| 6,500 |
|
Insurance expense | 18,000 |
|
| 300 | 17,700 |
|
Depreciation expense | 0 |
| 26,000 |
| 26,000 |
|
Wage expense | 540,000 |
| 11,000 |
| 551,000 |
|
Utilities expense | 57,000 |
| 5,200 |
| 62,200 |
|
Interest expense | 0 |
| 333 |
| 333 |
|
Other operating expenses | 25,000 |
|
|
| 25,000 |
|
Income tax expense | 0 |
| 114,665 |
| 114,665 |
|
| $2,048,700 | $2,048,700 | $205,248 | $205,248 | $2,251,148 | $2,251,148 |
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