Question

The unadjusted trial balance of Big Construction company on December 31, 2020, contained the attached accounts at the end of the company's calendar year 5 Inventory taken on 12/31/2020 was $42.000 Depreciation on equipment was $9,000 Unpaid accrued salaries were $2.800 Unexpired rent amounted to $2,500 Supplies on hand were $1,800 Accrued Sales revenue on 12/31/2020 was $3,400 Expired Insurance amounted to $2,000 Interest on the company's notes receivable at year-end amounted to $400 Unearned rent revenue earned at year-end amounted to $4,500 7 Instructions: Journalize the above adjusting entries. Complete the worksheet using the above year-end information. Prepare a multiple-step income statement fior Big Construction Company as of December 31, 2020. Prepare an owner's equity statement for Big Construction Company as of December 31 2020 Prepaire a classified balance sheet for Big Construction Company as of December 31, 2020 Journalize the closing entries.

Answer 1

Requirement a: Prepare the following adjusting entries

Item Credit Debit $9,000 Account Title and Explanation Depreciation Expense Accumulated Depreciation - Equipment To record adjustment for depreciation expense $9,000 $2.800 Salaries and Wages Expense Salaries and Wages Payable To record adjustment for accrued salaries $2.800 $5.900 Rent Expense ($8,400 - $2,500) Prepaid Rent To record adjustment for rent expense $5.900 5 $1.100 Supplies Expense ($2.900 - $1.800) Supplies To record adjustment for supplies expense $1.100 6 $3,400 Accounts Receivable Sales Revenue To record adjustment for sales revenue earned $3.400 $2.000 Insurance Expense Prepaid Insurance To record adjustment for insurance expense $2.000 8 $400 Interest Receivable Interest Revenue To record adjustment for interest revenue earned $400 $4.500 Unearned Rental Revenue Rent Revenue To record adjustment for rent revenue earned $4,500

Requirement b: Complete the worksheet as follows

Requirement c: Prepare the following multi-step income statement

Account Title 4 BCC Work Sheet For the Month Ended December 31, 2020 Unadjusted Trial Balance Adjustments Adjusted Trial Balance Income Statement 1 Debit Credit Debit Credit/ Debit Credit Debit Credit $220.000 $220.000 $24.000 $24.000 $23,000 6 $3,400 $26.400 8 $400 $400 $47.000 $47.000 $47.000 $42.000 $4,300 $2,000 $2,300 $8.400 $5,900 $2,500 $2.900 5 $1,100 $1.800 $28.000 $28,000 $90,000 $90.000 $18,000 $9.000 $27,000 $28.000 $28.000 $2.800 $2.800 $12.5009 $4.500 $8.000 $75,000 $75,000 $124.000 $124.000 $4,700 $4,700 $279.000 $3,400 $282.400 $282.400 $2.100 $2.100 $2.100 $1.900 $1.900 $1.900 $51,000 $51.000 $51.000 $800 S800 $800 $1.200 $1.200 $1.200 $3,000 $3.000 $3,000 $21,000 4 $5.900 $26.900 $26.900 $18.000 $2.800 $20.800 $20.800 $2.800 $2.800 $2.800 $1,900 $1.900 $1,900 $2,200 $2,200 $2,200 2 $9.000 $9.000 $9.000 $1,100 $1.100 $1,100 $2.000 $2.000 $2.000 $15,000 8 $400 $15.400 $15.400 $2,700 $4,500 $7.200 $7.200 $556,200 $556,200 $29,100 $29,100 $571,800 571,800 $171,700 $349,000 $177.300 $349,000 $349,000 Balance Sheet Debit Credit $220.000 $24.000 $26.400 $400 $42.000 $2.300 $2,500 $1.800 $28.000 $90.000 $27.000 $28.000 $2.800 $8.000 $75,000 $124.000 $4.700 Cash Notes Receivable Accounts Receivable Interest Receivable Inventory Prepaid Insurance Prepaid Rent Supplies Land Equipment Accumulated Depreciation Equipment Accounts Payable Salaries and Wages Payable Unearned Rental Revenue Mortgage Payable Owner's Capital Owner's Drawings Sales Revenue Sales Returns and Allowances Sales Discounts Purchases Purchase returns and Allowances Purchase Discounts Freight - In Rent Expense Salaries and Wages Expense Utilities Expense Advertising Expense Interest Expense Depreciation Expense Supplies Expense Insurance Expense Interest Revenue Rent Revenue Total Net Income Totals $442,100 $264,800 $177,300 $442,100 $442.100

BCC
Income Statement
For the Year Ended December 31, 2020
Particulars	Amount	Amount
Sales Revenue	$282,400
Deduct: Sales Returns and Allowances	$2,100
Deduct: Sales Discounts	$1,900
Net Sales		$278,400
Cost of Goods Sold		$57,000
Gross Profit		$221,400
Expenses:
Rent Expense	$26,900
Salaries and Wages Expense	$20,800
Utilities Expense	$2,800
Advertising Expense	$1,900
Depreciation Expense	$9,000
Supplies Expense	$1,100
Insurance Expense	$2,000
Total Operating Expenses		$64,500
Operating income		$156,900
Other income / (Expenses)
Rent Revenue	$7,200
Interest Revenue	$15,400
Interest Expense	($2,200)	$20,400
Net Income		$177,300

Notes: Cost of goods sold

Particulars	Amount
Inventory Beginning balance	$47,000
Add: Purchases	$51,000
Add: Freight In	$3,000
Deduct: Purchase Returns and Allowances	($800)
Deduct: Purchase Discounts	($1,200)
Goods Available for sale	$99,000
Deduct: Ending balance of inventory	($42,000)
Cost of Goods Sold	$57,000

Requirement d: Prepare the owner's equity statement as follows

BCC
Statement of Owners' Equity
For the Year Ended December 31, 2020
Particulars		Amount
Beginning balance		$124,000
Add: Net income		$177,300
Deduct: Withdrawals		($4,700)
Ending balance		$296,600

Requirement e: Prepare the balance sheet as follows

BCC Balance Sheet December 31, 2020 Current Assets Cash $220.000 $24,000 $26.400 $400 $42.000 $2,300 $2,500 $1.800 $319,400 $28.000 $90.000 ($27.000) Notes Receivable Accounts Receivable Interest Receivable Inventory Prepaid Insurance Prepaid Rent Supplies Total Current Assets Property, Plant and Equipment Land Equipment Deduct: Accumulated Depreciation Equipment Total Assets Liabilities and Owners' Equity Current Liabilities Accounts Payable Salaries and Wages Payable Unearned Rental Revenue Total current liabilities Noncurrent Liabilities Mortgage Payable Total Liabilities Equity Owner's Capital Total Liabilities and Owners' Equity $63.000 $410,400 $28.000 $2.800 $8.000 $38.800 $75,000 $113.800 $296,600 $410,400

Requirement f: Prepare the following closing entries

Date	Account Title and Explanation	Debit	Credit
Dec 31	Sales Revenue	$282,400
	Interest Revenue	$15,400
	Rent Revenue	$7,200
	Inventory - Ending Balance	$42,000
	Purchase returns and Allowances	$800
	Purchase Discounts	$1,200
	Income Summary		$349,000
	To close revenue accounts to income summary
Dec 31	Income Summary	$171,700
	Sales Returns and Allowances		$2,100
	Sales Discounts		$1,900
	Inventory - Beginning Balance		$47,000
	Purchases		$51,000
	Freight - In		$3,000
	Rent Expense		$26,900
	Salaries and Wages Expense		$20,800
	Utilities Expense		$2,800
	Advertising Expense		$1,900
	Interest Expense		$2,200
	Depreciation Expense		$9,000
	Supplies Expense		$1,100
	Insurance Expense		$2,000
	To close expense accounts to income summary
Dec 31	Income Summary	$177,300
	Capital		$177,300
	To close income summary to capital
Dec 31	Capital	$4,700
	Withdrawals		$4,700
	To close withdrawals to capital