The following unadjusted trial balance is for Adams Construction Co. as of the end of its 2005 fiscal
year. The June 30, 2004, credit balance of the owner's capital account was $52,660, and the owner
invested $25,000 cash in the company during the 2005 fiscal year.
Property taxes payable
Long-term notes payable
S. Adams, Capital
S. Adams, Withdrawals
Construction fees earned
Property taxes expense
1. Prepare a 10-column work sheet for fiscal year 2005, starting with the unadjusted trial balance
and including adjustments based on these additional facts:
a. The supplies available at the end of fiscal year 2005 had a cost of $3,200.
b. The cost of expired insurance for the fiscal year is $3,900.
c. Annual depreciation on equipment is $8,500.
d. The June utilities expense of $550 is not included in the unadjusted trial balance because the
bill arrived after the trial balance was prepared. The $550 amount owed needs to be recorded.
e. The company's employees have earned $1,600 of accrued wages at fiscal year-end.
f. The rent expense incurred and not yet paid or recorded at fiscal year-end is $200.
g. Additional property taxes of $900 have been assessed for this fiscal year but have not been
paid or recorded in the accounts.
h. The long-term note payable bears interest at 1% per month. The unadjusted Interest Expense
account equals the amount paid for the first 11 months of the 2005 fiscal year. The $240 accrued
interest for June has not yet been paid or recorded. (Note that the company is required
to make a $5,000 payment toward the note payable during the 2006 fiscal year.)
2. Use the work sheet to enter the adjusting and closing entries; then journalize them.
3. Prepare the income statement and the statement of owner's equity for the year ended June 30 and
the classified balance sheet at June 30, 2005.
4. Analyze the following separate errors and describe how each would affect the 10-column work
sheet. Explain whether the error is likely to be discovered in completing the work sheet and, if
not, the effect of the error on the financial statements.
a. Assume that the adjustment for supplies used consisted of a credit to Supplies for $3,200 and
a debit for $3,200 to Supplies Expense.
b. When the adjusted trial balance in the work sheet is completed, the $17,500 Cash balance is
incorrectly entered in the Credit column.
Hello ericcarter and welcome to Just Answer
Please post your full question so that we can help
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Hello again eric :)
Yes, that is the full question, when I posted my message you had just typed the first line so the question was not clear. I have your book by the way (Are you using the 17th edition?)
If yes, then for future posts you do not need to type the problems, just tell me the question number and I will post the solution.
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I have posted the solution to Adam's company problem a long time ago, here it is again
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