Comprehensive Accounting Cycle Review Problem Student Name: Name: James Fair Complete the Comprehensive Problem, beginning on page 2, on the included work papers. Complete the A solution to this problem is not available for your reference, by design. It is time for you to complete a problem on your own. The following check gures are provided! "nad#usted Trial $alance Ad#usted Trial $alance +et Income Total T otal Assets Post/Closing Trial $alance
%&'&,(2' %&'2,&)* %&,-* %(2,2' %(2,--'
Comprehensive Accounting Cycle Review Problem 0n 1ecember &st Curt illiamson began an auto repair shop, illiamsons 3uality Automotive. The following information about 1ecember4s transactions, accounts, and ad#ustment data is available. Transaction T ransactions s
1ec. & & ( &' &( 22 2 26 & & & &
& illiamson contributed %*',''' cash to the business in e5change for capital. Purchased %&' %&',,6'' of e7uipment paying cash. Paid %-,*'' for a (/month insurance policy starting on 1ecember &. Paid %&6,''' cash to purchase land to be used in operations. Purchased o8ce supplies on account account,, %,'''. $orrowed %26,''' from the bank for business use. use . illiamson signed a note payable to the bank in the name of the business . Paid %6'' for advertising e5penses. Paid %& %&,,''' on account. The business business receive received d a bill for utilities to be paid in 9anuary, %26'. :evenues earned during the month included %&) %&),,*'' cash and %2 %2,,)'' on account. Paid employees; salaries %,'' and building rent %)''. :ecord as a compound entry. h. The business business receive received d %& %&,,--' for auto screening services to be performed ne5t mont month illiamson withdrew cash of %,''' .
Accounts s< Prepaid Insuranc e< >7uipment< Accumulated Cash< Accounts :eceivable< 08ce =upplie Cash< =upplies Insurance ?and<< Accounts Payable< "tilities Payable< Payable< Interest Payable< "nearned :evenue< +otes 1epreciation/>7uipment < ?and Payable<< illiamson, Capital Payable Capital<< illiamson illiamson,, ithdrawals< =ervice :evenue< :evenue< =alaries >5pense< >5pense< :ent >5pense pense<< "tilities >5pense pense<< Advertising >5pense< =upplies >5 >5pense pense<< Insurance >5 >5 pense pense<< Interest >5pense< >5pense< and 1epreciation >5pense/ >7uipment. Ad#ustment 1ata a. 08ce =upplies used during the month, month, %''. b. 1epreciation for the month month,, %&6'. c. 0ne month insurance has e5pired.
d.
Accrued Interest >5pense, >5pense, %)* .
Requirements: Complete the following on the attached work papers &. 2.
Prepare the #ournal entries and post to the T the T/accounts /accounts. Prepare an unad#usted trial balance. /accounts. the T/accounts . Prepare the ad#usting entries and post to the T -. Prepare an ad#usted trial balance. *. Prepare the income statement statement,, the statement of owner;s e7uity e7uity,, and a classied balance sheet . "se proper formatting techni7ues including headings, dollar signs, and underlining.
&
the T/accounts. /accounts. . Prepare the closing entries and post to the T ). Prepare a post/closing trial balance.
GENE GE NERA RAL L JOUR JOURNA NAL L DATE
ACCOUNT TITLES AND EXPLANATION
DEBIT
CREDIT
Record Transactio Transactions, ns, Adjusting Adjusting Entries, Closing Closing Entries in this this journal
1ec. &
1ec. &
1ec. &
1ec. (
Cash illiamson Capital 0wner Contribution
%*','''
>7uipment Cash Purchased >7uipment
&',6''
Pre/paid Insurance Cash Paid rent in advance
-,*''
?and Cash Paid cash for land
&6,'''
%*','''
&',6''
-,*''
&6,'''
1ec. &' 08ce =upplies Accounts Payable Purchased o8ce supplies on account
,'''
1ec. &(
Cash +otes Payable Collected cash on note
26,'''
Advertising >5pense Cash Paid cash e5pense
6''
1ec. 22
,'''
26,'''
6''
1ec. 2 A Ac ccounts Payable Cash Paid cash on account
&,'''
1ec. 26
26'
&,'''
"t "tilities >5pense Cash Paid Cash >5pense
26'
2
GENERAL JOURNAL DATE ACCOUNT TITLES AND EXPLANATION 1ec. & Cash Accounts Payable =ervice :evenue Performed services collected cash and account credit.
DEBIT &),*'' 2,)''
1ec. & =a =alaries e5pense :ent >5pense Cash Paid cash e5penses
,'' )''
1ec. &
&,--'
CREDIT
2',2''
-,''
Cash "nearned revenue Collected cash for future services.
&,--'
1ec. 1ec. & illi illiams amson, on, withdr withdraw awals als Cash 0wner ithdrawal
,''' ,''' ,'''
GENERAL LEDGER
Cash *',''' 26,'''
Accounts Receivable
Office Supplies
Prepaid Insurance
&',6''
&),*'' &,--'
-,*''
2,)''
-,*''
,'''
&6,''' 6'' &,''' @
26'
-,'' @ ,'''
Equipment &',6'' &,'''
Accumulated Depreciation – Equip.
and
Accounts Pa!able
&6,''' ,'''
"tilities Pa!able
Interest Pa!able
"nearned Revenue
#otes Pa!able$%illiamson
&, &,--' 26,'''
Capital$%illiamson *','''
%ithdra&als
Service Revenue
,'''
2',2''
-
Salaries E'pense ,''
Rent E'pense )''
Insurance E'pense
"tilities E'pense
Advertisin( E'pense
26 '
Supplies E'pense
6''
Interest E'pense
Depreciation E'p. Equip.
*
Income Summar!
Unadjusted Trial Balance Williamson Quality Automotive nad!usted "rial #alance $onth %nd &ecember '(st
Debits %*-,2' ,''' -,*'' &',6'' &6,'''
Cash 08ce =upplies Prepaid Insurance >7uipment ?and Accounts Payable :ent >5pense "nearned revenue
Credits
2''' 6'' &,--' 26,''' *','''
+otes +otes Pa Pa able/ able/i illia lliamso mson n Capital / Capital/illiamson illiamson ithdrawalsB =ervice :evenue =alaries e5pense Advertising >5pense "tilities e5pense Accounts :eceivable Total Total
,''' 2',2'' ,'' 6'' 26' 2)'' %&'&,(2' %&'&,(2'
Adjusted Trial Balance Williamson Quality Automotive Ad!usted "rial #alance $onth %nd &ecember '(st
Debits %*-,2' 2,-'' -,*''
Cash 08ce =upplies Prepaid Insurance Accumulated 1epreciation / Insurance >7uipment Accumulated 1epreciation >7uipment ?and Accounts Payable "nearned revenue
Credits
*'' &',6'' &6' &6,''' 2,''' &,--' 26,''' *','''
+otes Payable/illiamson Capital / Capital/illiamson illiamson ithdrawalsB =ervice :evenue :ent >5pense =alaries e5pense Advertising >5pense "tilities e5pense Accounts :eceivable 1epreciation >5pense / Insurance 1epreciation >5pense >7uipment /=upplies >5pense Interest >5pense Total Total
,''' 2',2'' 6'' ,'' 6'' 26' 2)'' *'' &6' '' )* %&'2,&)* %&'2,&)*
)
Inc!e State!ent
Williamson Quality Automotive )ncome *tatement $onth %nd &ecember '(st
:evenues! =ervice :evenue
2',2''
>5penses! =alaries e5pense Advertising >5pense "tilities e5pense Accounts :eceivable 1epreciation >5pense / Insurance 1epreciation >5pense >7uipment =upplies >5pense Interest >5pense :ent >5pense Total >5penses +et Income
,'' 6'' 26' 2)'' *'' &6' '' )* 6'' %(,** %&',*
State!ent " C#an$es in O%ner&s E'uit( Williamson Quality Automotive +wners %quity $onth %nd &ecember '(st
illiamson Capital 1ecember & 0wner Contribution +et Income for the month
' *',''' &',* ',* ,'''B %*),*
0wner ithdrawal illiamson Capital 1ecember &
6
Balance S#eet Williamson Quality Automotive #alance *heet $onth %nd &ecember '(st
Assets Cash 08ce =upplies Prepaid Insurance Accum. 1ep. Insurance ?and >7uipment Accum. 1ep. >7uipment Total Total Assets
?iabilities %*-,2' 2,-'' -,*'' *''B &6,''' &',6'' &6'B %6(,26'
Accounts Payable "nearned revenue +otes Payable/illiamson
&,--' 26,'''
Total ?iabilities
0wner4s >7uity >7uity illiamson illiamson Capital Total Total ?iabilities ?iabilities @ 0wners >7uity >7uity
(
%*),* %6(,26'
Pst)Clsin$ Trial Balance Williamson Quality Automotive Post,Closing "rial #alance $onth %nd &ecember '(st
Debits %*-,2' 2,-'' -,*''
Cash 08ce =upplies Prepaid Insurance Accumulated 1epreciation / Insurance >7uipment Accumulated 1epreciation >7uipment ?and Accounts Payable "nearned revenue
Credits
*'' &',6'' &6' &6,'''
+otes Payable/illiamson Capital / Capital/illiamson Total! Total!
%(2,--'
&'
2,''' &,--' 26,''' *',''' %(2,--'