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Power Demolition Company Trial Balance Analysis

This document provides the unadjusted trial balance for Power Demolition Company as of April 30, 2017. It lists the owner's capital account balance of $46,900 from the previous year and an additional $40,000 investment by the owner during the 2017 fiscal year. It also provides additional facts about adjustments needed for supplies, expired insurance, depreciation, unpaid utilities and expenses, accrued wages and interest, and assessed property taxes to prepare the adjusted trial balance, journal entries, and financial statements for the year ended April 30, 2017.

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trilocksp Singh
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27 views1 page

Power Demolition Company Trial Balance Analysis

This document provides the unadjusted trial balance for Power Demolition Company as of April 30, 2017. It lists the owner's capital account balance of $46,900 from the previous year and an additional $40,000 investment by the owner during the 2017 fiscal year. It also provides additional facts about adjustments needed for supplies, expired insurance, depreciation, unpaid utilities and expenses, accrued wages and interest, and assessed property taxes to prepare the adjusted trial balance, journal entries, and financial statements for the year ended April 30, 2017.

Uploaded by

trilocksp Singh
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

The following unadjusted trial balance is for Power

Demolition Company
The following unadjusted trial balance is for Power Demolition Company

The following unadjusted trial balance is for Power Demolition Company as of the end of its
April 30, 2017, fiscal year. The April 30, 2016, credit balance of the owner's capital account was
$46,900, and the owner invested $40,000 cash in the company during the 2017 fiscal year.

Required
1. Prepare and complete a 10-column work sheet for fiscal year 2017, starting with the
unadjusted trial balance and including adjustments based on these additional facts.
a. The supplies available at the end of fiscal year 2017 had a cost of $7,900.
b. The cost of expired insurance for the fiscal year is $10,600.
c. Annual depreciation on equipment is $7,000.
d. The April utilities expense of $800 is not included in the unadjusted trial balance because the
bill arrived after the trial balance was prepared. The $800 amount owed needs to be recorded.
e. The company's employees have earned $2,000 of accrued wages at fiscal year-end.
f. The rent expense incurred and not yet paid or recorded at fiscal year-end is $3,000.
g. Additional property taxes of $550 have been assessed for this fiscal year but have not been
paid or recorded in the accounts.
h. The long-term note payable bears interest at 12% per year. The unadjusted Interest Expense
account equals the amount paid for the first 11 months of the 2017 fiscal year. The $300
accrued interest for April has not yet been paid or recorded. The company is required to make a
$10,000 payment toward the note payable during the 2018 fiscal year.
2. Using information from the completed 10-column work sheet in part 1, journalize the adjusting
entries and the closing entries.
3. Prepare the income statement and the statement of owner's equity for the year ended April
30 and the classified balance sheet at April 30, 2017.
4. Analyze the following separate errors and describe how each would affect the 10-column
work sheet.
Explain whether the error is likely to be discovered in completing the work sheet and, if not, the
effect of the error on the financial statements.
a. Assume the adjusting entry to reflect expiration of insurance coverage for the period was
recorded with a $2,000 credit to Prepaid Insurance and a $2,000 debit to Insurance Expense.
The adjustment should have been for $10,600.
b. When the adjusted trial balance in the work sheet was completed, assume that the $4,700
Repairs Expense account balance is extended to the Debit column of the Balance Sheet
columns.

The following unadjusted trial balance is for Power Demolition Company


SOLUTION-- [Link]
power-demolition-company/

Unlock answers here [Link]

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