Accounting Problem Adams

For this problem complete the task of making the proper adjustments, closing the books and creating a balance sheet, income statement and statement of equity.

This problem must be prepared in the following order:

1. Transmittal Letter - This is the first page and should tell the supervisor what has been prepared and who has prepared it. If you choose to indicate how much fun it was to complete, please convey that information as well.

2. Balance Sheet

3. Income Statement

4. Statement of Shareholders Equity

5. Adjusting Journal Entries

6. Horizontal Close

Group 2 - ADAMS CORPORATION

In reviewing the initial trial balance, it is clear that adjustments must be made before the adjusted

trial balance will be correct.

Deferred Accounts:

1. Six percent of the sales revenues are funds received for products to be delivered in 2017.

2. Insurance costs of $3000 which were shown as prepaid expenses in the unadjusted trial balance provided coverage for 2016.

3. Equipment has been used to generate revenues. The company estimates $4000 in depreciation for 2016.

Depreciation is entered only at year end at the time of the adjusting entries.

Accrued Accounts

4. Wages have been paid through December 28th. The seven employees worked December 29, 30 and 31.

and each earned $2000 per day.

5. An extra telephone line was installed in December. The telephone bill for $1900 including hookup and usage charges

was received on February 4th, 2017.

6. Interest accrues on the short term notes payable at an annual rate of 12 percent. The principal

has been outstanding all month. Interest expense has been accounted for through November 30, 2016

Interest on other debt has been paid at December 31, 2016.

7. The estimated income tax rate is 98%.

Unadjusted trial Balance

Unadjusted Trial Balance

At 12/31/16

		2
Corporation Name		ADAMS
GROUP BY LAST NAME
Accounts payable		26000
Accounts receivable		35000
Accrued expenses payable		18000
Accumulated depreciation		14000
Cash		3000000
Common Stock		20000
Cost of goods sold		325000
Current maturities on long term debt		5000
Depreciation expense		23000
Equipment		250000
Administrative expense		15000
Income tax expense		0
Income taxes payable		12000
Political expenses		1600
Interest expense		2500
Insurance Expense
Interest income		16000
Land		3200000
Long term debt		21000
Long term investments		6000
Bonds Payable		36000
Marketable securities		5600000
N/A		0
Prepaid expenses		12300
Retained earnings		7742742
Sales revenues		4500000
Shares Outstanding		5000
Short Notes Payable		74658
Unearned revenues		88000
Utilities expense		38000
Wages expense		65000
Shares Outstanding		5000