The following unadjusted trial balance is for ACE CONSTRUCTION CO. as of the end of its 2017 fiscal year. The June 30, 2016, credit balance of the owner’s capital account was $57,000, and the owner invested $20,000 cash in the company during the 2017 fiscal year. 

Adjustments:

1. The supplies available at the end of fiscal year 2017 had a cost of $3,420.
2. The cost of expired insurance for the fiscal year is $3,465.
3. Annual depreciation on equipment is $8,500.
4. The June utilities expense of $520 is not included in the unadjusted trial balance because the bill arrived after the trial balance was prepared. The $520 amount owed needs to be recorded.
5. The company’s employees have earned $1,700 of accrued wages at fiscal year-end.
6. The rent expense incurred and not yet paid or recorded at fiscal year-end is $300.
7. Additional property taxes of $500 have been assessed for this fiscal year but have not been paid or recorded in the accounts.
8. The long-term note payable bears interest at 12% per year. The unadjusted Interest Expense account equals the amount paid for the first 11 months of the 2017 fiscal year. The $290 accrued interest for June has not yet been paid or recorded. (The company is required to make a $6,000 payment toward the note payable during the 2018 fiscal year.)

Required:
1. Prepare a 10-column work sheet for fiscal year 2017, starting with the unadjusted trial balance and including adjustments based on the additional facts.
2a. Prepare the adjusting entries. (all dated June 30, 2017).
2b. Prepare the closing entries. (all dated June 30, 2017):
3a. Prepare the income statement for the year ended June 30.
3b. Prepare the statement of owner's equity for the year ended June 30.
3c. Prepare the classified balance sheet at June 30, 2017.

Transcribed Image Text:

No. 101 Cash 126 Supplies ACE CONSTRUCTION CO. Unadjusted Trial Balance June 30, 2017 Account Title 128 Prepaid insurance 167 Equipment 168 Accumulated depreciation-Equipment 201 Accounts payable 203 Interest payable 208 Rent payable 210 Wages payable 213 Property taxes payable 251 Long-term notes payable 301 V. Ace, Capital Debit $ 15,500 9,500 5,500 148,010 Credit $ 21,000 5,600 0 0 0 0 29,000 77,000 302 V. Ace, Withdrawals 27,000 401 Construction fees earned 141,000 612 Depreciation expense-Equipment 0 623 Wages expense 42,000 633 Interest expense 3,190 637 Insurance expense 0 640 Rent expense 13,000 652 Supplies expense 0 683 Property taxes expense 4,700 684 Repairs expense 2,000 690 Utilities expense 3,200 Totals $273,600 $273,600 No. 101 Cash 126 Supplies ACE CONSTRUCTION CO. Unadjusted Trial Balance June 30, 2017 Account Title 128 Prepaid insurance 167 Equipment 168 Accumulated depreciation-Equipment 201 Accounts payable 203 Interest payable 208 Rent payable 210 Wages payable 213 Property taxes payable 251 Long-term notes payable 301 V. Ace, Capital Debit $ 15,500 9,500 5,500 148,010 Credit $ 21,000 5,600 0 0 0 0 29,000 77,000 302 V. Ace, Withdrawals 27,000 401 Construction fees earned 141,000 612 Depreciation expense-Equipment 0 623 Wages expense 42,000 633 Interest expense 3,190 637 Insurance expense 0 640 Rent expense 13,000 652 Supplies expense 0 683 Property taxes expense 4,700 684 Repairs expense 2,000 690 Utilities expense 3,200 Totals $273,600 $273,600

Answer rating: 100% (QA)

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