Reference no: EM131371324

Assignment

Part 1: COMPREHENSIVE PROBLEM ALTERNATIVE

Determining Adjustments

At the end of the first three month of operation, Evergreen Repair, Inc.'s trial balance is as follows.

Evergreen Repair, Inc. Trial Balance 31-Mar-14
Cash	7983
Accounts Receivable	5872
Office Supplies	970
Prepaid Rent	1500
Equipment	5200
Accounts Payable		2629
Unearned Repair Revenue		1146
Common Stock		5000
Retained Earnings		6314
Dividends	1800
Repair Revenue		12,236
Wages Expense	3580
Office Cleaning Expense	420
	27,325	27,325

Evergreen has hired an accountant to prepare financial statements to determine how well the company is doing after the three months. Upon examining the accounting records, the accountant finds the following items of interest:

a. An inventory of office supplies reveals supplies on hand of $469.
b. The prepaid rent account includes the rent for the first three months plus a deposit for April's rent.
c. Depreciation on the equipment for the first three months is $560.
d. The balance of the Unearned Repair Revenue Account represents a 12-month service contract paid in advance on February 1.
e. On March 31, accrued wages total $168.
f. Federal income taxes for the three months are estimated to be $1250.

REQUIRED

All adjustments affect one balance sheet account and one income statement account. For each of these situations, show the accounts affected, the amount of the adjustment (using a + or - to indicate an increase or decrease), and the balance of the account after the adjustment in the following format.

Balance	Amount of	Balance	Income	Amount of	Balance
Sheet	Adjustment	After	Statement	Adjustment	After
Account	(+ or -)	Adjustment	Account	(+ or -)	Adjustment

Part 2: COMPREHENSIVE PROBLEM SUPPLEMENT

Preparation of a Worksheet, Financial Statements, and Adjusting and Closing Entries

At the end of the fiscal year, Siglo delivery Service, Inc.'s trial balance appeared as follows:

Siglo Delivery Service, Inc.  Trial balance 31-Aug-14
Cash	10072
Accounts receivable	29314
Prepaid Insurance	5340
Delivery Supplies	14700
Office Supplies	2460
Land	15000
Building	196,000
Accumulated depreciation-Building		53400
Trucks	103,800
Accumulated Depreciation Trucks		30,900
Office Equipment	15,900
Accumulated Depreciation-Office Equipment		10,800
Accounts Payable		9396
Unearned Lockbox fees		8340
Mortgage Payable		72,000
Common Stock		100,000
Retained Earnings		28730
Dividends	30,000
Delivery service revenue		283,470
Lockbox Fee earned		28800
Truck Drivers Wages Expense	120,600
Office Salaries Expense	44,400
Gas, Oil, and Truck Repairs Expense	31050
Interest Expense	7200
	625,836	625,836

REQUIRED

1. Enter the trial balance amounts in the Trial Balance columns of a worksheet and complete the worksheet using the information that follows:

a. Expired insurance, $3060
b. Inventory of unused delivery supplies, $1430
c. Inventory of unused office supplies, $186
d. Estimated depreciation on the building, $14,400
e. Estimated depreciation on the trucks, $15,450
f. Estimated depreciation on the office equipment, $2,700
g. The company credits the lockbox fees of customer who pay in advance to the Unearned lockbox fees account. Of the amount credited, to this account during the year, $5630 had been earned by August 31.
h. Lockbox fee earned but unrecorded and uncollected at the end of the accounting period, $816.
i. Accrued but unpaid truck drivers' wages at the end of the year, $1920

2. Prepare an income statement, a statement of retained earnings, and a balance sheet for the company.

3. Prepare adjusting and closing entries from the worksheet.

4. Can the worksheet be used as a substitute for the financial statement? Explain your answer.