Preparation of a Work Sheet, Financial Statements, and Adjusting, Closing, and Reversing Entries

At the end of the fiscal year, Siglo Delivery Service’s trial balance appeared as follows.

REQUIRED

1. Enter the trial balance amounts in the Trial Balance columns of a work sheet and complete the work sheet using the information that follows.

a. Expired insurance, $3060

b. Inventory of unused delivery supplies, $1,430

c. Inventory of unused office supplies, $186

d. Estimated depreciation on the building, $14,400

e. Estimated depreciation on the trucks, $15,450

f. Estimated depreciation on the office equipment, $2,700

g. The company credits the lockbox fees of customers who pay in advance to the Unearned Lockbox Fees account. Of the amount credited to this account during the year, $5,630 had been earned by August 31.

h. Lockbox fees earned but unrecorded and uncollected at the end of the accounting period, $816

i. Accrued but unpaid truck drivers’ wages at the end of the year, $1,920

2. Prepare an income statement, a statement of owner’s equity, and a balance sheet for the company. Assume the owner, Raul Siglo, made no additional investments.

3. Prepare adjusting, closing, and, when necessary, reversing entries from the work sheet.

4. Can the work sheet be used as a substitute for the financial statements? Explain your answer.
 

Siglo Delivery Service Trial Balance August 31, 2014 Cash 10,072 Accounts Receivable 29,314 Prepaid Insurance 5,340 Delivery Supplies Office Supplies 14,700 2,460 Land 15,000 Building Accumulated Depreciation-Building 196,000 53,400 Trucks 103,800 Accumulated Depreciation-Trucks Office Equipment 30,900 15,900 Accumulated Depreciation-Office Equipment 10,800 Accounts Payable 9,396 Unearned Lockbox Fees 8,340 Mortgage Payable 72,000 R. Siglo, Capital R. Siglo, Withdrawals 128,730 30,000 Delivery Service Revenue 283,470 Lockbox Fees Earned 28,800 Truck Drivers' Wages Expense Office Salaries Expense Gas, Oil, and Truck Repairs Expense Interest Expense 120,600 44,400 31,050 7,200 625,836 625,836