Fundmental of Financial Accounting

Exercise 2 SARA's's Landry is a small business owned by Sara Ricchi. She provided us with the documents for the year ended December, 31, 2020. She is concerned that there are a number of errors in all documents made by her accountants (at least 15 wrong amounts). Required: Determine what those errors are and correctly recalculate amounts in all documents. You can use an end-of-period spreadsheet as a correct initial data. Adjusted TB Debit Credit SARA'S'S Laundry End-of-period Spreadsheet (Work Sheet) For the Year Ended December 31, 2020 Unadjusted TB Adjustments Debit Credit Debit Credit 11,000 21,500 17.900 9.600 5,700 232,600 125,400 6,500 11,800 11,000 3.600 3.900 232,600 131,900 11,800 1.100 105,600 1.100 105,600 Account Title Cash Laundry Supplies Prepaid Insurance Laundry Equipment Aceum. Depreciation Accounts Payable Wages Payable Sara Ricchi, Capital Sara Riechi, Drawing Laundry Revenue Wages Expense Rent Expense Utilities Expense Laundry Supplies Exp. Depreciation Expense Insurance Expense Miscellaneous Expense 10.000 10,000 232,200 232,200 125,200 1.100 126,300 40,000 40.000 19,700 17.900 6,500 5,700 19,700 17,900 6,500 5,700 5,400 5,400 475,000 475,000 31.200 31,200 482,600 482,600 S232,200 SARA'S LAUNDRY Income Statement For the Year Ended December 31, 2020 Laundry revenue Expenses: Wages expense Rent expense Utilities expense Laundry supplies expense Depreciation expense Insurance expense Miscellaneous expense Total expenses Net income $126,300 40,000 19,700 3,600 6,500 5,700 5,400 221,500 $ 10,700 SARA'S LAUNDRY Statement of Owner's Equity For the Year Ended December 31, 2020 Sara Ricchi, capital, July 1, 2013 Net income for the year Less withdrawals Increase in owner's equity Sara Ricchi, capital, June 30, 2020 $105,600 $10,700 10,000 7,000 $112,600 Closing Entries 2020 June 30 Laundry Revenue Income Summary 232,200 232,200 121,500 30 Income Summary Wages Expense Rent Expense Utilities Expense Laundry Supplies Expense Depreciation Expense Insurance Expense Miscellaneous Expense 126,300 40,000 19,700 17,900 6,500 5,700 5,400 10.700 30 Income Summary Sara Ricchi, Capital 10,700 15,000 30 Sara Ricchi Capital Sara Ricchi, Drawing 5,000 SARA'S'S LAUNDRY Post-Closing Trial Balance December 31, 2020 Credit Balances Cash Laundry Supplies Prepaid Insurance Laundry Equipment Accumulated Depreciation Accounts Payable Wages Payable Sara Ricchi, Capital Sara Ricchi, Drawing Debit Balances 11,000 3,600 3,900 232,600 131,900 11,800 1,100 106,300 10,000 Total 383,000 119,200 Exercise 1 John Black's Company maintains and repairs warning lights, such as those found on radio towers and lighthouses. John Black's Company prepared the end-of-period spreadsheet shown below at July 31, 2020, the end of the current fiscal year. End-of-Period Spreadsheet for the year ended Unadjusted Trial Balance Adjustments Adjusted Trial Balance Account Title Dr. Cr. Dr. Cr. Dr. Cr. Cash 25,000 25,000 Accounts Receivable 38,900 3,150 42.050 Prepaid Insurance 4,200 2.500 1.700 Supplies 2.700 1.830 870 Land 98,000 98,000 Building 222.000 222.000 Accum. Depr.--Building 205.300 1.600 206,900 Equipment 101.000 101.000 Accum. Depr. Equipment 78.000 7.800 85,800 Salaries & Wages Payable 5.600 5.600 Uneamed Rent 2.100 1.000 1.100 Mortgage Payable 1,900 1,900 John Black, Capital 203,170 203,170 John Black, Drawing 10,000 10,000 Fees Earned 113,630 3,150 116,780 Rent Revenue 1.000 1,000 Salaries & Wages Expense 56,000 5,600 61,600 Selling Expense 21,700 21.700 Utilities Expense 11,450 11.450 Repairs Expense 8,870 8,870 Depr. Exp.--Equipment 7.800 7.800 Insurance Expense 2.500 2.500 Supplies Expense 1,830 1.830 Depreciation Exp. Building 1.600 1.600 Miscellaneous Expense 4,280 4,280 604.100 604,1001 23,480 23,480 622.250 622.250 Instructions: 1. Prepare an income statement for the year ended July 31. 2. Prepare statement of owner's equity for the year ended July 31. Additional investments were made during the year, 11.070. 3. Prepare a balance sheet as of July 31. 4. Based upon the end-of-period spreadsheet, journalize the closing entries. 5. Prepare a post-closing trial balance. P.S. Please use financial statements from the following tabs. Exercise Income St and St of Own Equity Balan. Income Statement for the year ended Total revenues Expenses: Total expenses Net income Statement of Owner's Equity for the year ended capital, Investment Net income Less withdrawals Increase in owner's equity . capital, SARA'S'S LAUNDRY Balance Sheet December 31, 2020 Liabilities Current liabilities: Accounts payable $11.800 $ 11,000 21,500 3.900 $ 11,800 S 36.400 Assets Current assets: Cash Laundry supplies Prepaid insurance Total current assets Property, and, and equipment: Laundry equipment Less accumulated depreciation Total property, plant, and equipment Total assets 1.100 12.900 S232,600 131,900 Total current liabilities Long-term labilities: Wages payable Total liabilities Owner's Equity Sara Ricchi, capital Total liabilities and owner's equity 88,000 364,500 $400,900 $100,900 Exercise Income St and St of Own Equity Balance Sheet Journal and Trial Balance Balance Sheet at Assets Liabilities Current assets! Current liabilities: Long-term liabilities: Total liabilities Total current assets Property, plant and equipment: Owner's Equity Total property, plant and equipment Total assets Total liabilities and owner's equity Exercise Income St and St of Own Equity Balance Sheet Journal and Trial Balance Debit Credit Date 2020 Description Closing Entries Post-Closing Triat Balance Debil Balance Credit Balanes