Question

Required information [The following information applies to the questions displayed below.) The December 31, 2021, unadjusted trial balance for the Wolkstein Drug Company is presented below. December 31 is the company's year-end reporting date. Credits Debits 50,810 29,750 4,600 46,250 102,000 30,600 33,000 Account Title Cash Accounts receivable Prepaid rent Inventory Equipment Accumulated depreciation Accounts payable Salaries payable Common stock Retained earnings Sales revenue Cost of goods sold Salaries expense Rent expense Depreciation expense Utilities expense Advertising expense Totals 100,000 29,500 463,000 277,800 92,600 27,600 18,520 6,170 656,100 656,100 The following year-end adjusting entries are required: a. Depreciation expense for the year on the equipment is $10,200. b. Salaries at year-end should be accrued in the amount of $5,960.

Required:
1. Prepare and complete a worksheet.

2. Prepare an income statement for 2021 and a balance sheet as of December 31, 2021.

Answer 1

Income statement Dr Cr Account Titiles Cash Accounts receivables Prepaid Rent Inventory Equipment Accumulated depreciation Accounts Payable Salaries Payable Comon Stock Reatained Earnings Sales Revenue Cost of Goods Sold Salaries Expense Rent Expense Depreciation Expense Utilities Expense Advertising Expense Totals Net Income Totals Wolkstein Drug Company Work Sheet For the year ended December 31, 2021 Unadjusted Trial Balance Adjustements Adjusted Trial Balance Dr C | D Dr Cr $ 50,801 $ 50,801 $ 29,750 $ 29,750 $ 4,600 $ 4,600 $ 46,250 $ 46,250 $ 102,000 $ 102,000 $ 30,600 $10,200 $ 40,800 $ 33,000 $ 33,000 $ 5,960 $ 5,960 $ 100,000 $100,000 $ 29,500 $ 29,500 $ 463,000 $463,000 $ 277,800 $ 277,800 $ 92,600 $ 5,960 $ 98,560 $ 27,600 27,600 $10,200 $ 10,200 $ 18,520 $ 18,520 $ 6,170 $ 6,170 $ 656,091 $ 656,100 $16,160 $16,160 $ 672,251 $672,260 Balance sheet Dr Cr $ 50,801 $ 29,750 $ 4,600 $ 46,250 $102,000 $ 40,800 $ 33,000 $ 5,960 $100,000 $ 29,500 $463,000 $ $277,800 $ 98,560 $ 27,600 $ 10,200 $ 18,520 $ 6,170 $438,850 $ 24,150 $463,000 $463,000 $233,401 $ 209,260 $ 24,150 $233,401 $233,410 $463,000

$ 131,410 Wolkstein Drug Company Balance Sheet As on December 31,2021 Assets Current assets Cash 50,810 Accounts Receiavble 29,750 Prepaid Rent 4,600 Inventory 46,250 Total Current Assets Property, plant and Equipment Equipment $ 102,000 Less: Accumulated Depreciation $ 40,800 Total Property, plant and Equipment Total assets Total Liabilities and Shareholders Equity Current Liabilities Accounts Payable Salaries payable Total Liabilities Shareholders' Equity Common Stock 100,000 Retained Earnings $ 53,650 Total Stockholders' Equity Total Liabilities and equity 61,200 192,610 $ $ $ $ 33,000 5,960 38,960 $ S 153,650 192,610

$ $ $ 463,000 277,800 185,200 Wolkstein Drug Company Income Statement For the Year Ended December 31,2021 Revenue Sales Revenue Less: Cost of Goods Sold Gross Profit Expenses Salaries expense 98,560 Rent Expense 27,600 Depreciation Expense 10,200 Utilities Expense 18,520 Advertising expense 6,170 Total expenses Net Incomel (Loss) $ S 161,050 24,150 Working Notes: Wolkstein Drug Company Retained Earnings Statement For the Year Ended December 31,2021 Retained Earnings opening balance Net Income $ $ $ $ $ 29,500 24,150 53,650 Less: Dividends paid Retained Earnings ending balance 53,650