The adjusted trial balance of Kobe Repairs on December 31, 2011, follows.
|
|
KOBE REPAIRS Adjusted Trial Balance December 31,2011 |
|
|
|
No. |
Account Title |
Debit |
Credit |
|
101 |
Cash |
$13,000 |
|
|
124 |
Office supplies |
1,200 |
|
|
128 |
Prepaid insurance |
1,950 |
|
|
167 |
Equipment |
48,000 |
|
|
168 |
Accumulated depreciation—Equipment |
|
$4,000 |
|
201 |
Accounts payable |
|
12,000 |
|
210 |
Wages payable |
|
500 |
|
301 |
S. Kobe, Capital |
|
40,000 |
|
302 |
S. Kobe, Withdrawals |
15,000 |
|
|
401 |
Repair fees earned |
|
77,750 |
|
612 |
Depreciation expense—Equipment |
4,000 |
|
|
623 |
Wages expense |
36,500 |
|
|
637 |
Insurance expense |
700 |
|
|
640 |
Rent expense |
9,600 |
|
|
650 |
Office supplies expense |
2,600 |
|
|
690 |
Utilities expense |
1,700 |
|
|
Totals |
$134,250 |
$134,250 |
Required
1. Prepare an income statement and a statement of owner’s equity for the year 2011, and a classified balance sheet at December 31, 2011. There are no owner investments in 2011.
2. Enter the adjusted trial balance in the first two columns of a six column table. Use columns three and four for closing entry information and the last two columns for a post closing trial balance. Insert an Income Summary account as the last item in the trial balance.
3. Enter closing entry information in the six column table and prepare journal entries for it.
4. Assume for this part only that
a. None of the $700 insurance expense had expired during the year. Instead, assume it is a prepayment of the next period’s insurance protection.
b. There are no earned and unpaid wages at the end of the year.
Describe the financial statement changes that would result from these two assumptions.