Reference no: EM13884637
Preparation of a Work Sheet, Financial Statements, and Adjusting, Closing, and reversing Entries
Julio Theater Company's trial balance at the end of its current fiscal year follows.
2, June 30, 2014, net income: $197,244
Julio theater Company trial Balance June 30, 2014
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Cash
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63,600
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Accounts Receivable
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37,088
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Prepaid Insurance
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39,200
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Office Supplies
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1,560
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Cleaning Supplies
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7,180
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Land
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40,000
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Building
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800,000
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Accumulated Depreciation-Building
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78,800
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Theater Furnishings
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740,000
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Accumulated Depreciation-Theater Furnishings
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130,000
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Office Equipment
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63,200
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Accumulated Depreciation-Office Equipment
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31,120
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Accounts Payable
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91,012 |
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Gift Books Liability
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83,800 |
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Mortgage Payable
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600,000
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P. Julio, Capital
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625,296
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P. Julio, Withdrawals
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120,000
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Ticket Sales Revenue
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822,800 |
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Theater Rental Revenue
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90,400 |
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Usher Wages Expense
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314,000
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Office Wages Expense
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48,000
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Utilities Expense
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225,400
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Interest Expense
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54,000
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2,553,228
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2,553,228
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Required:
1. Enter Julio Theater's trial balance amounts in the Trial Balance columns of a work sheet and complete the work sheet using the following information:
a. Expired insurance, $34,800.
b. Inventory of unused office supplies, $488.
c. Inventory of unused cleaning supplies, $936.
d. Estimated depreciation on the building, $28,000.
e. Estimated depreciation on the theater furnishings, $72,000.
f. Estimated depreciation on the office equipment, $6,320.
g. The company credits all gift books sold during the year to the Gift Books Liability account. A gift book is a booklet of ticket coupons that is purchased in advance as a gift. The recipient redeems the coupons at some point in the future. On June 30 it was estimated that $75,600 worth of the gift books had been redeemed.
h. Accrued but unpaid usher wages at the end of the accounting period, $1,720.
2. Prepare an income statement, a statement of owner's equity, and a balance sheet. Assume no additional investments by the owner, P. Julio.
3. Prepare adjusting, closing, and, when necessary, reversing entries from the work sheet.
4. Business Application- Can the work sheet be used as a substitute for the finan- cial statements? Explain your answer.
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