Question

The following data are taken from the unadjusted trial balance of the Westcott Company at December 31,

2017. Each account carries a normal balance.

Accounts Payable \( 6 Prepaid Insurance \)18 Retained Earnings \(32

Accounts Receivable . 12 Revenue 75 Dividends 6

Accumulated Depreciation—Equip. . 15 Salaries Expense 18 Unearned Revenue 12

Cash . 21 Supplies 24 Utilities Expense . 12

Equipment . 39 Common Stock . 10

1. Use the data above to prepare a work sheet. Enter the accounts in proper order and enter their balancesin the correct Debit or Credit column.

2. Use the following adjustment information to complete the work sheet.

a. Depreciation on equipment, \)3

b. Accrued salaries, \(6

c. The \)12 of unearned revenue has been earned

d. Supplies available at December 31, 2017, \(15

e. Expired insurance, \)15

Short answer

The net income is $24.

Step-by-step solution

Step-by-Step SolutionStep 1: Definition of worksheet

The worksheet is a statement which shows the more than one financial statements and adjustments.

Worksheet

Particulars	Unadjusted		Adjustment		Adjusted		Income Statement		Balance Sheet
	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	$21				$21				$21
Accounts Receivable	$12				$12				$12
Supplies	$24			$9	$15				$15
Prepaid Insurance	$18			$15	$3				$3
Equipment	$39				$39				$39
Accumulated Depreciation-Equipment		$15		$3		$18				$18
Accounts Payable		$6		$6		$12				$12
Salaries Payable
Unearned Fees		$12	$12			$0				$0
Common Stock		$10				$10				$10
Retained Earnings		$32				$32				$32
Dividends	$6				$6				$6
Revenue		$75		$12		$87		$87
Depreciation Expense- Equipment			$3		$3		$3
Salaries Expense	$18		$6		$24		$24
Supplies Expense			$9		$9		$9
Insurance Expense			$15		$15		$15
Utilities Expense	$12				$12		$12
Totals	$130	$130	$45	$45	$159	$159	$63	$87	$96	$72
Net Income							$24			$24
Total							$87	$87	$96	$96