Heel To Toe Shoes’ adjusted trial balance on December 31, 2011, follows.
|
HEEL TO TOE SHOES Adjusted Trial Balance December 31,2011 |
||||
|
No. |
Account Title |
Debit |
Credit |
|
|
101 |
Cash |
$13,450 |
||
|
125 |
Store supplies |
4,140 |
||
|
128 |
Prepaid insurance |
2,200 |
||
|
167 |
Equipment |
33,000 |
||
|
168 |
Accumulated depreciation—Equipment |
|
$9,000 |
|
|
201 |
Accounts payable |
|
1,000 |
|
|
210 |
Wages payable |
|
3,200 |
|
|
301 |
P. Holt, Capital |
|
31,650 |
|
|
302 |
P. Holt, Withdrawals |
16,000 |
||
|
401 |
Repair fees earned |
|
62,000 |
|
|
612 |
Depreciation expense—Equipment |
3,000 |
||
|
623 |
Wages expense |
28,400 |
||
|
637 |
Insurance expense |
1,100 |
||
|
640 |
Rent expense |
2,400 |
||
|
651 |
Store supplies expense |
1,300 |
||
|
690 |
Utilities expense |
1,860 |
||
|
Totals |
$106,850 |
$106,850 |
||
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 the middle two columns for closing entry information and the last two columns for a post closing trial balance. Insert an Income Summary account (No. 901) 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 $1,100 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.