E4-16 The following items were taken from the financial statements of D. Gygi Company.

(All amounts are in thousands.)

Long-term debt $ 1,000 Accumulated depreciation—equipment $ 5,655
Prepaid insurance 880 Accounts payable 1,444
Equipment 11,500 Notes payable (due after 2016) 400
Stock investments (long-term) 264 Common stock 10,000
Debt investments (short-term) 3,690 Retained earnings 2,955
Notes payable (due in 2016) 500 Accounts receivable 1,696
Cash 2,668 Inventory 1,256

Instructions
Prepare a classified balance sheet in good form as of December 31, 2015.

D. GYGI COMPANY
BALANCE SHEET
FOR THE MONTH DECEMBER

ASSETS
Current Assets
Prepaid Insurance
Debt Investments
Cash
Accounts Receivable
Inventory
Total Current Assets
Stock Investments
Fixed Assets
Equipment
Less: Accumulated Depreciation
Total Assets
Liabilities and Stockholders' Equity
Current Liabilities
Notes Payable
Accounts Payable
Total Current Liabilities
Long term Liabilities
Long term Debt
Notes Payable
Total Long term Debt
Total Liabilities
Shareholders' Equity
Common Stock
Retained Earnings
Total Stockholders' Equity
Total Liability and Stockholders' Equity
ment $ 5,655
1,444
400
10,000
2,955
1,696
1,256

D. GYGI COMPANY
BALANCE SHEET
OR THE MONTH DECEMBER 31, 2015

$880.00
$3,690.00
$2,668.00
$1,696.00
$1,256.00
$10,190.00
$264.00

$11,500.00
$5,655.00 $5,845.00
$16,299.00

$500.00
$1,444.00
$1,944.00

$1,000.00
$400.00
$1,400.00
$3,344.00

$10,000.00
$2,955.00
$12,955.00
$16,299.00
P4-1B Pevnick Inc. began operations as a detective agency on January 1, 2015. The trial
balance columns of the worksheet for Pevnick Inc. at March 31 are as follows.

PEVNICK INC.
Worksheet
For the Quarter Ended March 31, 2015
Trial Balance
Account Titles Dr. Cr.
Cash 11,400
Accounts Receivable 5,620
Supplies 1,050
Prepaid Insurance 2,400
Equipment 30,000
Notes Payable 10,000
Accounts Payable 12,350
Common Stock 20,000
Dividends 600
Service Revenue 13,620
Salaries and Wages Expense 2,200
Travel Expense 1,300
Rent Expense 1,200
Miscellaneous Expense 200
55,970 55,970

Unadjusted Adjustments Adjusted

Account Titles Debit ($) Credit ($) Debit ($) Credit ($) Debit ($)
Cash $11,400.00 $11,400.00
Accounts Receivables $5,620.00 $2,030.00 $7,650.00
Supplies $1,050 $770.00 $280.00
Prepaid Insurance $2,400.00 $600.00 $1,800.00
Equipment $30,000.00 $30,000.00
Accumulated Depreciation $800.00
Notes Payables $10,000.00
Accounts Payables $12,350.00
Interest Payable $300.00
Common Stock $20,000.00
Dividends $600.00 $600.00
Service Revenue $13,620.00 $2,030
Salaries and Wages Expenses $2,200.00 $2,200.00
Travel Expense $1,300.00 $1,300.00
Rent Expense $1,200.00 $1,200.00
Miscellaneous Expense $200.00 $200.00
Supplies Expense $770.00 $770.00
Depreciation Expense $800.00 $800.00
Interest Expense $300.00 $300.00
Insurance Expense $600.00 $600.00
$55,970.00 $55,970.00 $4,500.00 $4,500.00 $59,100.00
 Other data:
1. Supplies on hand total $280.
2. Depreciation is $800 per quarter.
3. Interest accrued on 6-month note payable, issued January 1, $300.
4. Insurance expires at the rate of $200 per month.
5. Services performed but unbilled at March 31 total $2,030.

Instructions
(a) Enter the trial balance on a worksheet and complete the worksheet.
(b) Prepare an income statement and a retained earnings statement for the quarter and a
classified balance sheet at March 31.
(c) Journalize the adjusting entries from the adjustments columns of the worksheet.
(d) Journalize the closing entries from the financial statement columns of the worksheet.

Credit ($)

$800.00
$10,000.00
$12,350.00
$300.00
$20,000.00

$15,650.00
$59,100.00
 PEVNICK INC.
INCOME STATEMENT
FOR THE QUARTER ENDED MARCH 31, 2015

Service Revenue
Less: Operating Expenses
Salaries and Wages Expenses $2,200.00
Travel Expense $1,300.00
Rent Expense $1,200.00
Miscellaneous Expense $200.00
Supplies Expense $570.00
Depreciation Expense $800.00
Interest Expense $300.00
Insurance Expense $600.00
Total Expense
Net Income
ME STATEMENT
ER ENDED MARCH 31, 2015

$15,650.00

$7,170.00
$8,480.00
 PEVNICK INC.
RETAINED EARNINGS STATEMENT
FOR THE QUARTER ENDED MARCH 31, 2015

Net Income $8,480.00

Less: Dividend $600.00
Retained Earning as on March 31, 2015 $7,880.00
EVNICK INC.
ARNINGS STATEMENT
ER ENDED MARCH 31, 2015
 PEVNICK INC.
BALANCE SHEET
FOR THE QUARTER ENDED MARCH 31, 2015

ASSETS
Current Assets
Cash $11,400.00
Accounts Receivables $7,650.00
Supplies $280.00
Prepaid Insurance $1,800.00
Total Current Assets
Equipment $30,000.00
Less: Accumulated Depreciation $800.00
Equipment, Net
Total Assets
Liabilities and Shareholders' Equity
Current Liabilities
Notes Payables
 EVNICK INC.
LANCE SHEET
ER ENDED MARCH 31, 2015

$21,130.00

$29,200.00
$50,330.00