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P4-30A, cont.
Requirement 4
Requirement 5
P4-31A Preparing a worksheet, financial statements, and closing entries
Learning Objectives 1, 2, 3
2. Total Assets $106,500
The unadjusted trial balance of Farish Investment Advisers at December 31, 2018, follows:
Adjustment data at December 31, 2018:
a. Unearned Revenue earned during the year, $800.
b. Office Supplies on hand, $4,500.
c. Depreciation for the year, $4,500.
d. Accrued Salaries Expense, $5,000.
e. Accrued Service Revenue, $6,500.
Requirements
1. Prepare a worksheet for Farish Investment Advisers at December 31, 2018.
2. Prepare the income statement, the statement of retained earnings, and the classified balance sheet in
account format.
3. Prepare closing entries.
FARISH INVESTMENT ADVISERS
Worksheet
December 31, 2018
Account Names
Unadjusted Trial
Balance Adjustments
Adjusted Trial
Balance Income Statement Balance Sheet
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash $ 30,000 $ 30,000 $ 30,000
Accounts Receivable 51,000 e. $6,500 57,500 57,500
Office Supplies 7,000 $ 2,500 b. 4,500 4,500
Equipment 28,000 28,000 28,000
Accum. Dep.—Equip $ 9,000 4,500 c. $ 13,500 $ 13,500
Accounts Payable 13,000 13,000 13,000
Salaries Payable 5,000 d. 5,000 5,000
Unearned Revenue 5,500 a. 800 4,700 4,700
Notes Payable 21,000 21,000 21,000
Common Stock 27,000 27,000 27,000
Retained Earnings 29,500 29,500 29,500
Dividends 29,000 29,000 29,000
Service Revenue 93,000 800 a. 100,300 $ 100,300
6,500 e.
Insurance Expense 2,500 2,500 $ 2,500
Salaries Expense 40,000 d. 5,000 45,000 45,000
Supplies Expense b. 2,500 2,500 2,500
Interest Expense 5,500 5,500 5,500
Rent Expense 5,000 5,000 5,000
Dep. Expense—Equip. c. 4,500 4,500 4,500
Total $ 198,000 $ 198,000
$
19,300 $ 19,300
$
214,000 $ 214,000 $ 65,000 $ 100,300 $ 149,000 $ 113,700
Net Income 35,300 35,300
Total $ 100,300 $ 100,300 $ 149,000 $ 149,000
SOLUTION
Requirement 1
P4-32A Completing the accounting cycle from adjusting entries to post-closing trial
balance with an optional worksheet
Learning Objectives 1, 2, 3, 4, 5, 6
5. Net Income $18,890
The unadjusted trial balance of Walton Anvils at December 31, 2018, and the data for the
adjustments follow:
Adjustment data:
a. Unearned Revenue still unearned at December 31, $1,800.
b. Prepaid Rent still in force at December 31, $2,100.
c. Office Supplies used, $1,500.
d. Depreciation, $390.
e. Accrued Salaries Expense at December 31, $200.
Requirements
1. Open the T-accounts using the balances in the unadjusted trial balance.
2. Complete the worksheet for the year ended December 31, 2018 (optional).
3. Prepare the adjusting entries, and post to the accounts.
4. Prepare an adjusted trial balance.
5. Prepare the income statement, the statement of retained earnings, and the classified balance
sheet in report form.
6. Prepare the closing entries, and post to the accounts.
7. Prepare a post-closing trial balance.
8. Calculate the current ratio for the company.
SOLUTION
Requirements 1, 3, and 6
