Accounting Homework Help

hw20ch20420i-04.0120adj20jes20fs.xls

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Problem

Berry Corporation prepared the following preliminary trial balance. The trial balance and other information was evaluated by Delton Wiser, CPA. Delton has returned a list of proposed adjustments that are necessary to facilitate preparation of correct financial statements for the year ending December 31, 20X3.
	BERRY CORPORATION
	Trial Balance
	December 31, 20X3
			Debits	Credits
		Cash	$ 30,540	$ -
		Accounts receivable	45,000	-
		Supplies	7,000	-
		Equipment	244,500	-
		Accumulated depreciation	-	46,500
		Accounts payable	-	12,700
		Unearned revenue	-	31,250
		Notes payable	-	80,000
		Capital stock	-	100,000
		Retained earnings, Jan. 1	-	63,200
		Dividends	12,000	-
		Revenues	-	289,800
		Wages expense	214,600	-
		Utilities expense	8,700	-
		Selling expense	41,610	-
		Depreciation expense	12,000	-
		Interest expense	7,500	-
			$ 623,450	$ 623,450
Delton discovered that 40% of the unearned revenue appearing in the trial balance had actually been earned as of the end of the year.
A physical count of supplies on hand revealed a year-end balance of only $3,000.
Unpaid and unrecorded invoices for utilities for December amounted to $1,500.
The last payday was December 26. Employees are owed an additional $3,900 that has not been recorded.
Additional depreciation of $3,100 needs to be recorded.
(a)	Prepare journal entries relating to the adjustments.
(b)	Prepare an adjusted trial balance (you might utilize a partial worksheet for this task, as shown in the downloadable form).
(c)	Prepare an income statement and statement of retained earnings for 20X3, and a classified balance sheet as of the end of the year.
(d)	Berry's bookkeeper argued with Delton that there was no need to record the adjustments since they have no "net" effect on income. Evaluate whether this observation is true of false, and comment on the appropriateness of this logic.

&R&"Myriad Web Pro,Bold"&20I-04.01

I-04.01

Worksheet(a)

	GENERAL JOURNAL				Page
	Date	Accounts		Debit	Credit

&L&"Myriad Web Pro,Bold"&12Name: Date: Section: &R&"Myriad Web Pro,Bold"&20I-04.01(a)

I-04.01(a)

Worksheet(b)


BERRY CORPORATION
Worksheet for Adjusted Trial Balance
December 31, 20X3
		Trial Balance		Adjustments		Adjusted Trial Balance
		Debits	Credits	Debits	Credits	Debits	Credits
	Cash	$ 30,540	-	-	-	-	-
	Accounts receivable	45,000	-	-	-	-	-
	Supplies	7,000	-	-	-	-	-
	Equipment	244,500	-	-	-	-	-
	Accumulated depreciation	-	$ 46,500	-	-	-	-
	Accounts payable	-	12,700	-	-	-	-
	Utilities payable	-	-	-	-	-	-
	Wages payable	-	-	-	-	-	-
	Unearned revenue	-	31,250	-	-	-	-
	Notes payable	-	80,000	-	-	-	-
	Capital stock	-	100,000	-	-	-	-
	Retained earnings, Jan. 1	-	63,200	-	-	-	-
	Dividends	12,000	-	-	-	-	-
	Revenues	-	289,800	-	-	-	-
	Wages expense	214,600	-	-	-	-	-
	Utilities expense	8,700	-	-	-	-	-
	Selling expense	41,610	-	-	-	-	-
	Depreciation expense	12,000	-	-	-	-	-
	Supplies expense	-	-	-	-	-	-
	Interest expense	7,500	-	-	-	-	-
		$ 623,450	$ 623,450	$ -	$ -	$ -	$ -

&L&"Myriad Web Pro,Bold"&12Name: Date: Section: &R&"Myriad Web Pro,Bold"&20I-04.01(b)

I-04.01(b)

Worksheet(c)


	BERRY CORPORATION
	Income Statement
	For the Year Ending December 31, 20X3
		Revenues
		Services to customers		$ -
		Expenses
		Wages	$ -
		Utilities	-
		Selling	-
		Depreciation	-
		Supplies	-
		Interest	-	-
		Net income		$ -
	BERRY CORPORATION
	Statement of Retained Earnings
	For the Year Ending December 31, 20X3
		Beginning retained earnings		$ -
		Plus: Net income		-
				$ -
		Less: Dividends		-
		Ending retained earnings		$ -
	BERRY CORPORATION
	Balance Sheet
	December 31, 20X3
		Assets
		Current assets
		Cash	$ -
		Accounts receivable	-
		Supplies	-	$ -
		Property, plant & equipment
		Equipment	$ -
		Less: Accumulated depreciation	-	-
		Total assets		$ -
		Liabilities
		Current liabilities
		Accounts payable	$ -
		Utilities payable	-
		Wages payable	-
		Unearned revenue	-	$ -
		Long-term liabilities
		Notes payable		-
		Total liabilities		$ -
		Stockholders' equity
		Capital stock	$ -
		Retained earnings	-
		Total stockholders' equity		-
		Total liabilities and equity		$ -
(d)

&L&"Myriad Web Pro,Bold"&12Name: Date: Section: &R&"Myriad Web Pro,Bold"&20I-04.01(c)(d)

I-04.01(c)(d)