Question
The following unadjusted trial balance is for Montana Construction Company as of year-end for the December 31, 20x7 fiscal year. The December 31, 20x6 credit
The following unadjusted trial balance is for Montana Construction Company as of year-end for the December 31, 20x7 fiscal year. The December 31, 20x6 credit balance of the stockholders equity account is $46,900, and the stockholders invested $40,000 cash in the company during 20x7.
NO. Account Title Debit Credit
101 Cash $7,000
126 Supplies $16,000
128 Pre-paid insurance $12,600
167 Equipment $200,000
168 Accumulated depreciation equipment $14,000
201 Accounts payable $6,800
251 Long-term notes payable $30,000
301 Stockholders equity $86,900
302 Dividends $12,000
401 Demolition fees earned $187,000
623 Wage expense $41,400
633 Interest expense $3,300
640 Rent expense $13,200
683 Property tax expense $9,700
684 Repairs expense $4,700
690 Utilities expense $4,800
TOTALS $324,700 $324,700
Instructions:
a) Journalize the following adjusting entries as of fiscal year-end December 31, 20x7.
b) Using the worksheet, post the adjusting entries using the adjustments column and prepare the adjusted trial balance.
c) Create financial statements. Namely, i) the income statement, ii) statement of stockholders equity, and iii) the balance sheet for 20x7.
Adjustments needed:
The supplies available at the end of fiscal 20x7 year are at a cost of $7,900.
The cost of expired insurance for the fiscal year is $10,600.
Annual depreciation on equipment is $7,000; no other depreciation adjustment was made in 20x7.
The December utilities expense of $800 is not included in the adjusted trial balance because the bill arrived after the trial balance was prepared. The $800 amount owed needs to be recorded.
The company's employees have earned $2000 in accrued wages for the fiscal year.
The rent expense not yet paid or recorded in the fiscal year is $3000.
Additional property taxes of $550 have been assessed for the fiscal year, but have not yet been paid or recorded in the accounts.
The $300 accrued interest for December has not yet been paid and reported.
Montana Construction Co, Adjustment December 31, 20X7 | |||||||||
Adjust # | Account Names | Debit | Credit | ||||||
1 | |||||||||
2 | |||||||||
3 | |||||||||
4 | |||||||||
5 | |||||||||
6 | |||||||||
7 | |||||||||
8 | |||||||||
Montana Construction Co, Adjustment December 31, 20X7 | Continued | ||||||||
UTB | ADJUSTMENT | ATB | |||||||
Acct # | Account Names | Debit | Credit | Debit | Credit | Debit | Credit | ||
TOTALS | |||||||||
BE SURE TO CREATE A FINANCIAL STATEMENT FROM THE ABOVE ATB |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started