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Preparation of A Work Sheet, Financial Statements, and Adjusting, Closing, and Reversing Entries

The document provides a trial balance for Reed delivery service as of August 31, 2010 and instructions to prepare a worksheet, income statement, statement of owner's equity, and balance sheet from the trial balance. Additional information is given about various account balances and adjustments needed. The assistant is to complete the worksheet with the trial balance, record adjustments, and prepare the required financial statements and journal entries. A worksheet cannot substitute for financial statements as it does not organize information into the required statement formats.

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Sumair Shahid
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130 views2 pages

Preparation of A Work Sheet, Financial Statements, and Adjusting, Closing, and Reversing Entries

The document provides a trial balance for Reed delivery service as of August 31, 2010 and instructions to prepare a worksheet, income statement, statement of owner's equity, and balance sheet from the trial balance. Additional information is given about various account balances and adjustments needed. The assistant is to complete the worksheet with the trial balance, record adjustments, and prepare the required financial statements and journal entries. A worksheet cannot substitute for financial statements as it does not organize information into the required statement formats.

Uploaded by

Sumair Shahid
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Preparation of a work sheet, financial statements, and adjusting, closing, and reversing

entries

P 4. At the end of fiscal year, the trial balance of Reed delivery service appeared as shown
below.

Reed delivery service


Trial balance
August 31, 2010

Cash $10,072
Accounts receivable 29,314
Prepaid insurance 5,340
Delivery supplies 14,700
Office supplies 2,460
Land 15,000
Building 196,000
Accumulated depreciation-building $53,400
Trucks 103,800
Accumulated depreciation-trucks 30,900
Office equipment 15,900
Accumulated depreciation-office equipment 10,800
Accounts payable 9,396
Unearned lockbox fees 8,340
Mortgage payable 72,000
N. Reed, capital 128,730
N. Reed, withdrawals 30,000
Delivery service revenue 283,470
Lockbox fees earned 28,800
Truck drivers’ wage expense 120,600
Office salaries expense 44,400
Gas, Oil, and truck repairs expense 31,050
Interest expense 7,200
$625,836 $625,836

Required:
1. Enter the trial balance amounts in the trial balance columns of a work sheet and complete
the work sheet using the information that follows:
a) Expired insurance, $3,060
b) Inventory of unused delivery supplies, $1,430
c) Inventory of unused office supplies, $186
d) Estimated depreciation on the building, $14,400
e) Estimated depreciation on the truck, $15,450
f) Estimated depreciation on the office equipment, $2,700
g) The company credits the lockbox fees account. Of the amount credited to this account
during the year, $5,630 had been earned by August 31.
h) Lockbox fees earned but not recorded and uncollected at the end of the accounting
period, $816
i) Accrued but unpaid truck drivers’ wages at the end of the year, $1,920
2. Prepare an income statement, a statement of owner’s equity, and a balance sheet for the
company. Assume the owner, Natalie Reed, made no additional investments.
3. Prepare adjusting, closing, and, when necessary, reversing entries from the work sheet
4. Can the work sheet be used as a substitute for the financial statements? Explain your
answer.

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