Financial Statement Homework #1 - Smith Contractors, Inc.

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Financial Statement Homework #1 Name___________________
Please circle section time: 8:00, 9:30, 12:30, 2:00, 3:30
Smith Contractors, Inc.
December 31, 2014
Unadjusted Trial balance
Cash 58,400
Accounts Receivable 22,000
Supplies on Hand 5,500
Prepaid Insurance 36,000
Inventory 10,000
Vehicle 15,000
Equipment 75,000
Accumulated Depreciation 52,000
Accounts Payable 8,000
Unearned Revenue 14,900
Wages Payable 2,000
Long-Term Notes Payable 45,000
Common Stock 46,000
Retained Earnings (1/1/2014) 128,000
Dividends 5,000
Sales Revenue 416,000
COGS 100,000
Delivery Expense 45,000
Depreciation Expense 16,000
Rent Expense 54,000
Insurance Expense 20,000
Wages Expense 195,000
Supplies Expense 16,000
Interest Expense 4,000
Income Tax Expense 35,000
Total 711,900 711,900
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Part 1: Prepare adjusting journal entries using the unadjusted trial
balance on the previous page and the information provided below. Use only the
account names provided on the previous page (do not create any new account
names).
1. The prepaid insurance balance reflects a12-month insurance policy which
started on Sept. 1, 2014, and no adjustments were made from Sept. 1 – Dec.
31, 2014. Write the adjusting journal entry for Dec. 31, 2014.
2. Additional depreciation expense of $15,000 needs to be recorded for the year
ended 2014.
3. Additional wages due to employees of $5,000 ($5,000 more than the recorded
$2,000 balance) needs to be recorded at year end. These wages will be paid
to employees on January 9, 2015. (next month)
4. The company has completed $6,900 of the $14,900 in unearned revenue as
of Dec. 31st
.
5. In Dec. the company provided services worth $2,000 to clients that were not
yet billed or recorded by Dec. 31. Record the additional revenue.
6. On Dec 31st the company completed a physical count of their supplies and
determined that only $3,500 of supplies are still on hand.
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Part 2: Post the adjusting journal entries to t-accounts:
(Hints on getting started: Above each T-account, write the account name of each account affected by
an adjusting journal entry (you may not need to use all of the T-accounts). Write in the unadjusted
balance for each of these accounts (from page 1)…the unadjusted balance might be a debit, a credit,
or zero balance. Now you are ready to post your adjusting journal entries from page 2 onto the
corresponding T-accounts and then calculate adjusted balances.)
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Part 3: Prepare the Adjusted Trial Balance (i.e., after the previous 6 journal
entries are posted)
Smith Contractors, Inc.
December 31, 2014
Adjusted Trial balance
Cash
Accounts Receivable
Supplies on Hand
Prepaid Insurance
Inventory
Vehicle
Equipment
Accumulated Depreciation
Accounts Payable
Unearned Revenue
Wages Payable
Long-Term Notes Payable
Common Stock
Retained Earnings (1/1/2014)
Dividends
Sales Revenue
COGS
Delivery Expense
Depreciation Expense
Rent Expense
Insurance Expense
Wages Expense
Supplies Expense
Interest Expense
Income Tax Expense
Total
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Part 4: Prepare the Income Statement, the Statement of Retained Earnings, and a Classified
Balance Sheet (in this order). Include the appropriate titles, subtotals and totals.
(You may not use all the lines provided in the statements depending on how you label titles)
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Part 5: Answer the following questions using the above completed
financial statements:
What is Net Income or Net Loss?
What is Total Current Assets?
What is Total Current Liabilities?
What is Total Assets?
What is Total Stockholders Equity?