Some people like to play a game that constructs a sequence of chemical elements where each element in the sequence begins with the last letter of its predecessor. For example,….
Prepare an income statement, a statement of retained earnings, and a balance sheet.
Preparation of a Work Sheet, Financial Statements, and Adjusting and Closing Entries
The trial balance on the opposite page was taken from the ledger of Wylie Package Delivery Corporation on August 31, 20×7, the end of the company’s fiscal year.
1. Enter the trial balance amounts in the Trial Balance columns of a work sheet and complete the work sheet using the following information:
a. Expired insurance, $1,530.
b. Inventory of unused delivery supplies, $715.
c. Inventory of unused office supplies, $93.
d. Estimated depreciation, building, $7,200.
e. Estimated depreciation, trucks, $7,725.
f. Estimated depreciation, office equipment, $1,350.
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, $2,815 had been earned by August 31.
h. Lockbox fees earned but unrecorded and uncollected at the end of the accounting period, $408.
i. Accrued but unpaid truck drivers’ wages at the end of the year, $960.
j. Management estimates federal income taxes to be $6,000.
2. Prepare an income statement, a statement of retained earnings, and a balance sheet.
3. Prepare adjusting and closing entries.