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Chapter 3: Q26QS (page 144)

The Adjusted Trial Balance columns of a 10-column work sheet for Planta Company follow. Complete the

work sheet by extending the account balances into the appropriate financial statement columns and by

entering the amount of net income for the reporting period.

7,000

27,200

42,000

32,000

15,400

6,500

38,000

13,000

8,700

\(189,800

\) 17,500

15,000

4,200

3,600

20,000

45,500

84,000

$189,800

101

106

153

154

183

201

209

233

307

318

319

401

611

622

640

677

Cash

Accounts receivable

Trucks

Accumulated depreciation—Trucks

Land

Accounts payable

Salaries payable

Unearned fees

Common stock

Retained earnings

Dividends

Plumbing fees earned

Depreciation expense—Trucks

Salaries expense

Rent expense

Miscellaneous expenses

Totals

Account Title

Unadjusted

Trial Balance

Adjusted

Trial Balance

Dr.

Adjustments

Cr. Dr. Cr.

Income

Statement

Dr. Cr.

Balance Shee

No. Dr. Cr. Dr. Cr.

1

Short Answer

Expert verified

Answer:

The net income is $17,800

Step by step solution

01

Definition of worksheet

The worksheet is a complete summary of the financial statements of the company.

02

Worksheet

Particulars

Unadjusted

Adjusted

Income Statement

Balance Sheet


Debit

Credit

Debit

Credit

Debit

Credit

Debit

Credit

Cash



$7,000




$7,000


Accounts Receivable



$27,200




$27,200


Truck



$42,000




$42,000


Accumulated Depreciation-Truck




$17,500




$17,500

Land



$32,000




$32,000


Accounts Payable




$15,000




$15,000

Salaries Payable




$4,200




$4,200

Unearned Fees




$3,600




$3,600

Common Stock




$20,000




$20,000

Retained Earnings




$45,500




$45,500

Dividends



$15,400




$15,400


Plumbing Fees Earned




$84,000


$84,000



Depreciation Expense- Truck



$6,500


$6,500




Salaries Expense



$38,000


$38,000




Rent Expense



$13,000


$13,000




Miscellaneous Expense



$8,700


$8,700




Totals



$189,800

$189,800

$66,200

$84,000

$123,600

$105,800

Net Income





$17,800



$17,800

Total





$84,000

$84,000

$123,600

$123,600

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Most popular questions from this chapter

Question:Prepare year-end adjusting journal entries for M&R Company as of December 31, 2017, for each of the

following separate cases. (Entries can draw from the following partial chart of accounts: Cash; Accounts

Receivable; Interest Receivable; Equipment; Wages Payable; Salary Payable; Interest Payable; Lawn

Services Payable; Unearned Revenue; Revenue; Interest Revenue; Wages Expense; Salary Expense;

Supplies Expense; Lawn Services Expense; Interest Expense.)

a. M&R Company provided \(2,000 in services to customers that are expected to pay the company sometime

in January following the company’s year-end.

b. Wage expenses of \)1,000 have been incurred but are not paid as of December 31.

c. M&R Company has a \(5,000 bank loan and has incurred (but not recorded) 8% interest expense of

\)400 for the year ended December 31. The company will pay the \(400 interest in cash on January 2

following the company’s year-end.

d. M&R Company hired a firm to provide lawn services at a monthly fee of \)500 with payment occurring

on the 15th of the following month. Payment for December services will occur on January 15

following the company’s year-end.

e. M&R Company has earned \(200 in interest revenue from investments for the year ended December

31. The interest revenue will be received on January 15 following the company’s year-end.

f. Salary expenses of \)900 have been earned by supervisors but not paid as of December 31.

Question: The following three separate situations require adjusting journal entries to prepare financial statements as

of April 30. For each situation, present both:

∙ The April 30 adjusting entry.

∙ The subsequent entry during May to record payment of the accrued expenses.

Entries can draw from the following partial chart of accounts: Cash; Accounts Receivable; Prepaid

Interest; Salaries Payable; Interest Payable; Legal Services Payable; Unearned Revenue; Revenue; Salaries

Expense; Interest Expense; Legal Services Expense; Depreciation Expense.

a. On April 1, the company retained an attorney for a flat monthly fee of \(3,500. Payment for April legal

services was made by the company on May 12.

b. A \)900,000 note payable requires 12% annual interest, or \(9,000, to be paid at the 20th day of each

month. The interest was last paid on April 20, and the next payment is due on May 20. As of April 30,

\)3,000 of interest expense has accrued.

c. Total weekly salaries expense for all employees is $10,000. This amount is paid at the end of the day

on Friday of each five-day workweek. April 30 falls on a Tuesday, which means that the employees

had worked two days since the last payday. The next payday is May 3.

In the blank space beside each numbered balance sheet item, enter the letter of its balance sheet classification. If the item should not appear on the balance sheet, enter a Z in the blank.

A. Current assets E. Current liabilities

B. Long-term investments F. Long-term liabilities

C. Plant assets G. Equity

D. Intangible assets

6. Notes payable (due in 15 years)

Prepare adjusting journal entries for the year ended (date of) December 31, 2017, for each separate situation.

(Entries can draw from the following partial chart of accounts: Cash; Accounts Receivable; Supplies;

Prepaid Insurance; Equipment; Accumulated Depreciation—Equipment; Wages Payable; Unearned Revenue;

Revenue; Wages Expense; Supplies Expense; Insurance Expense; Depreciation Expense—Equipment.)

a. Depreciation on the company’s equipment for 2017 is computed to be \(18,000.

b. The Prepaid Insurance account had a \)6,000 debit balance at December 31, 2017, before adjusting for

the costs of any expired coverage. An analysis of the company’s insurance policies showed that \(1,100

of unexpired insurance coverage remains.

c. The Office Supplies account had a \)700 debit balance on December 31, 2016; and \(3,480 of office

supplies were purchased during the year. The December 31, 2017, physical count showed \)300 of supplies

available.

d. Two-thirds of the work related to \(15,000 of cash received in advance was performed this period.

e. The Prepaid Insurance account had a \)6,800 debit balance at December 31, 2017, before adjusting for the

costs of any expired coverage. An analysis of insurance policies showed that \(5,800 of coverage had expired.

f. Wage expenses of \)3,200 have been incurred but are not paid as of December 31, 2017.

Adjusting entries affect at least one balance sheet account and at least one income statement account.

For the entries below, identify the account to be debited and the account to be credited from the following

accounts: Cash; Accounts Receivable; Prepaid Insurance; Equipment; Accumulated

Depreciation; Wages Payable; Unearned Revenue; Revenue; Wages Expense; Insurance Expense;

Depreciation Expense. Indicate which of the accounts is the income statement account and which is

the balance sheet account.

a. Entry to record revenue earned that was previously received as cash in advance.

b. Entry to record wage expenses incurred but not yet paid (nor recorded).

c. Entry to record revenue earned but not yet billed (nor recorded).

d. Entry to record expiration of prepaid insurance.

e. Entry to record annual depreciation expense.
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