Pauls Fishing Gear and Tackle Repair Inc. Winter 2018 Pauls Fishing Gear and Tackle Repair, Inc. is a fishing supply and repair store, run by its primary shareholder and manager Paul Martin. Presented below is the November 30, 2017, unadjusted trial balance of Pauls Fishing Gear and Tackle Repair, Inc. The account balances represent the results of entries recorded during the first 11 months of the year. The balance in Pauls common stock and retained earnings accounts have not changed since December 31, 2016. Currently, 16,000 shares of stock are outstanding and 25,000 have been authorized. Pauls board of directors have decided to reinvest this years profit for future use and will not pay dividends to shareholders (Trey, Will, Megan, and Ben, all friends of Paul) at the end of this year. All income tax effects are to be ignored for this project. Unadjusted Trial Balance November 30, 2017 REF DEBIT CREDIT Cash 111 16,200 Accounts Receivable 112 5,750 Supplies Inventory 113 2,300 Prepaid Rent 114 3,600 Equipment 115 75,000 Accumulated Depreciation, Equipment 116 15,000 Building 117 221,400 Accumulated Depreciation, Building 118 40,000 Accounts Payable 211 11,750 Wages Payable 212 Utilities Payable 213 Interest Payable 214 Unearned Repair Revenue 220 2,500 Long- Term Notes Payable 231 95,000 Common Stock ($5 par value) 311 80,000 Retained Earnings 312 36,695 Income Summary 313 Dividends 314 Repair Revenue 411 145,000 Wages Expense 511 80,300 Rent Expense 512 13,000 Supplies Expense 513 Utilities Expense 514 3,000 Advertising Expense 515 1,500 Maintenance Expense 516 95 Depreciation Expense, Equipment 517 Depreciation Expense, Building 518 Interest Expense 519 3,800 Totals $425,945 $425,945 The following transactions occurred during the month of December 2017: December 3 Purchased $1,800 of supplies on account. Paid accounts payable of $3,500. Received $34,600 for repair revenue. Charged a customer $450 for repairs to deep-sea fish finder. This bill will not be paid until early January. Purchased $5,400 of supplies on account. Paid $400 for newspaper advertisements that ran on November 9. Paid utility expense of $350. Received $56,000 for repair revenue. Paid wages of $2,925 for period of December 1-14 Received $1,900 cash on account. Paid $4,200 of the amount owed from December 10. Acquired additional equipment costing $7,600 by paying $1,000 in cash and giving a long-term note payable for the remainder of the balance. Received bill and paid $995 for repairs to electronic scales. Sold 700 shares of $5 par value common stock for $5 a share for a new shareholder, Kent Clark. Received $24,000 for repair revenue. 30 Charged a customer $195 for repairs to a fishing rod. The balance will not be paid until January. Paid wages of $3,100 for the period of December 15-30. 31 Declared and paid a $2,300 dividend to shareholders. REQUIREMENTS 1. Prepare and post journal entries to record the December transactions listed above. 2. Prepare a 6 column worksheet (page 15). Enter the December 31 balances from the general ledger (pp. 8-14) in the unadjusted trial balance columns of the worksheet. Total the debits and credits to assure that debits equal credits. Also enter adjustments A-H on the worksheet and complete the worksheet.[1] 1. Depreciation for the year on the building was $17,500 2. Interest expense to be accrued on the note payable for 2017 is $400. 3. The December 31 supply inventory was $1,900. 4. Depreciation for the year on equipment was $5,250 5. Unpaid wages were $350 as of December 31. 6. Unpaid utilities expense for December 13-30 was $245. 7. Prepaid rent that has expired through December 31 amounts to $2,200. 8. Unearned repair revenue represents a payment received in advance on November 17 for repairs to a multifacited, computerized swivel with built in cup holder. The job was not complete as of December 31. However 2/5 ($1,000) has been completed and earned as of December 31. 3. Journalize and post the adjusting entries. In other words, record the above adjustments in the general journal and post those entries to the general ledger. So, these adjustments will be recorded both in (1) the 6 column worksheet, and (2) the general journal and general ledger. 4. Prepare an income statement, statement of retained earnings, and a classified balance sheet for the year ended December 31, 2017. 5. Journalize and post the closing entries. In other words, close the revenues and expenses, using journal entries recorded in the general journal and posted to the general ledger. Prepare post-closing Trial Balance. [1] You are reminded that the worksheet is not an official book of entry, as are the general journal and general ledger. The worksheet is merely used by the accountant to gain an idea of what the accounts will look like on the financial statements after the adjusting entries are completed. Adjusting entries must be prepared in the general journal, and posted to the general ledger. The entries in the worksheet are not official adjusting entries. You must journalize the adjusting journal entries and post them to the general ledger as well as complete the worksheet.