Accounting Problem- Viaduct Co.

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VIADUCT CO.
Work Sheet
For the Year Ended December 31, 2006
Adjusted Income Balance
Trial Balance Adjustments Trial Balance Statement Sheet
Account Title Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Cash 18,000
Accounts Receivable 82,500
Merchandise Inventory 165,000
Prepaid Insurance 9,700
Store Supplies 4,250
Office Supplies 2,100
Store Equipment 157,000
Accum. Depr. - Store Equipment 40,300
Office Equipment 50,000
Accum. Depr. - Office Equipment 17,200
Accounts Payable 66,700
Salaries Payable
Unearned Rent 1,200
Note Payable (final payment due 2016) 105,000
Robbin Jaeger, Capital 134,600
Robbin Jaeger, Drawing 30,000
Sales 815,000
Sales Returns and Allowances 11,900
Sales Discounts 7,100
Cost of Merch. Sold 476,200
Sales Salaries Expense 76,400
Advertising Expense 25,000
Depr. Exp. - Store Equipment
Store Supplies Expense
Misc. Selling Expense 1,600
Office Salaries Expense 34,000
Rent Expense 16,000
Insurance Expense
Depr. Exp. - Office Equipment
Office Supplies Expense
Misc. Admin. Expense 1,650
Rent Revenue
Interest Expense 11,600
Income Summary 1,180,000 1,180,000
Net income
Peggy Hussey: If the debit total of the income statement columns is higher than the credit total, enter the difference here.
Peggy Hussey: Enter the sum of the balance sheet debits.

Peggy Hussey: The credit total of the income statement columns should now be equal to the debit total.
Peggy Hussey: If the credit total of the balance sheet columns is higher than the debit total, enter the difference here.
Peggy Hussey: Enter the sum of the balance sheet credits.
Peggy Hussey: The debit total of the balance sheet columns should now be equal to the credit total.
Peggy Hussey: If the debit total of the balance sheet columns is higher than the credit total, enter the difference here.
Peggy Hussey: The credit total of the balance sheet columns should now be equal to the debit total.
Peggy Hussey: Enter the sum of the debit adjustments.
Peggy Hussey: Enter the sum of the credit adjustments.
Peggy Hussey: Enter the sum of the adjusted debits.
Peggy Hussey: Enter the sum of the adjusted credits.
Peggy Hussey: Enter the sum of the income statement debits.
Peggy Hussey: If the credit total of the income statement columns is higher than the debit total, enter the difference here.
Peggy Hussey: Enter the sum of the income statement credits.
Peggy Hussey: The debit total of the income statement columns should now be equal to the credit total.
2. VIADUCT CO.
Income Statement
For the Year Ended December 31, 2006
3. VIADUCT CO.
Statement of Owner's Equity
For the Year Ended December 31, 2006
4. VIADUCT CO.
Balance Sheet
December 31, 2006
Assets
Liabilities
Owner's Equity
5. JOURNAL
Post.
Date Ref. Debit Credit
2006 Adjusting Entries
Dec. 31
31
31
31
31
31
31 Salaries Expense- Sales 2,850
Salaries Expense- Office 800
Salaries Payable 3,650
31
6. JOURNAL
Post.
Date Ref. Debit Credit
2006 Closing Entries
Dec. 31
31
31
31

sol.

VIADUCT CO.
Work Sheet
For the Year Ended December 31, 2006
Adjusted Income Balance
Trial Balance Adjustments Trial Balance Statement Sheet
Account Title Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Cash 18000 18000 18000
Accounts Receivable 82500 82500 82500
Merchandise Inventory 165000 (a) 7500 157500 157500
Prepaid Insurance 9700 (b) 4000 5700 5700
Store Supplies 4250 (c) 3150 1100 1100
Office Supplies 2100 (d) 1500 600 600
Store Equipment 157000 157000 157000
Accum. Depr. - Store Equipment 40300 (e) 4500 44800 44800
Office Equipment 50000 50000 50000
Accum. Depr. - Office Equipment 17200 (f) 2800 20000 20000
Accounts Payable 66700 66700 66700
Salaries Payable (g) 3650 3650 3650
Unearned Rent 1200 (h) 800 400 400
Note Payable (final payment due 2016) 105000 105000 105000
Robbin Jaeger, Capital 134600 134600 * 134600 *
Robbin Jaeger, Drawing 30000 30000 30000
Sales 815000 815000 815000
Sales Returns and Allowances 11900 11900 11900
Sales Discounts 7100 7100 7100
Cost of Merch. Sold 476200 (a) 7500 483700 483700
Sales Salaries Expense 76400 (g) 2850 79250 79250
Advertising Expense 25000 25000 25000
Depr. Exp. - Store Equipment (e) 4500 4500 4500
Store Supplies Expense (c) 3150 3150 3150
Misc. Selling Expense 1600 1600 1600
Office Salaries Expense 34000 (g) 800 34800 34800
JOURNAL Rent Expense 16000 16000 16000
Insurance Expense (b) 4000 4000 4000
Date Depr. Exp. - Office Equipment (f) 2800 2800 2800
2006 Office Supplies Expense (d) 1500 1500 1500
Mar. Misc. Admin. Expense 1650 1650 1650
Rent Revenue (h) 800 800 800
Interest Expense 11600 11600 11600
Income Summary 1180000 1180000 27900 27900 1190950 1190950 688550 815800 502400 375150
Net income 127250 127250
815800 815800 502400 502400
Accum. Depr. - Equipment 17 5080
VIADUCT CO.
Income Statement
For the Year Ended December 31, 2006
Revenue from sales:
Sales 815000 *
Less: Sales returns and allowances 11900
Sales discounts 7100 19000 *
Net sales 796000 *
Cost of merchandise sold 483700 *
Gross profit 312300 *
Operating expenses:
Selling expenses:
Sales salaries expense 79250 *
Advertising expense 25000 *
Depreciation expense - store equipment 4500 *
Store supplies expense 3150 *
Miscellaneous selling expense 1600 *
Total selling expenses 113500 *
Administrative expenses:
Office salaries expense 34800 *
Rent expense 16000 *
Insurance expense 4000 *
Depreciation expense - office equipment 2800 *
Office supplies expense 1500 *
Miscellaneous admin. expense 1650
Total administrative expenses 60750 *
Total operating expenses 174250 *
Income from operations 138050 *
Other income and expense:
Rent revenue 800
Interest expense -11600 -10800 *
Net income 127250 *
VIADUCT CO.
Statement of Owner's Equity
For the Year Ended December 31, 2006
Robbin Jaeger, capital, January 1, 2006 134600 *
Net income for the year 127250
Less withdrawals 30000
Increase in owner's equity 97250
Robbin Jaeger, December 31, 2006 231850 *
VIADUCT CO.
Balance Sheet
December 31, 2006
Assets
Current assets:
Cash 18000
Accounts receivable 82500
Merchandise inventory 157500
Prepaid insurance 5700
Store supplies 1100
Office supplies 600
Total current assets 265400 *
Property, plant, and equipment
Store equipment 157000
Less: accumulated depreciation 44800 112200
Office equipment 50000
Less: accumulated depreciation 20000 30000
Total property, plant, and equipment 142200 *
Total assets 407600 *
Liabilities
Current liabilities:
Accounts payable 66700
Note payable (current portion) 15000
Salaries payable 3650
Unearned rent 400
Total current liabilities 85750 *
Long-term liabilities:
Note payable (final payment due 2016) 90000 *
Total liabilities 175750 *
Stockholders' Equity
Robbin Jaeger, Capital 231850 *
Net income 407600 *
JOURNAL
Post.
Date Ref. Debit Credit
2006 Adjusting Entries
Dec. 31 Cost of Merchandise Sold 7500 *
Merchandise Inventory 7500 *
31 Insurance Expense 4000 *
Prepaid Insurance 4000 *
31 Store Supplies Expense 3150 *
Store Supplies 3150 *
31 Office Supplies Expense 1500 *
Office Supplies 1500 *
31 Depr. Exp. - Store Equipment 4500 *
Accum. Depr. - Store Equipment 4500 *
31 Depr. Exp. - Office Equipment 2800 *
Accum. Depr. - Office Equipment 2800 *
31 Sales Salaries Expense 2850 *
Office Salaries Expense 800 *
Salaries Payable 3650 *
31 Unearned Rent 800
Rent Revenue 800
JOURNAL
Post.
Date Ref. Debit Credit
2006 Closing Entries
Dec. 31 Sales 815000 *
Rent Revenue 800
Income Summary 815800 *
31 Income Summary 688550 *
Sales Returns and Allowances 11900
Sales Discounts 7100
Cost of Merch. Sold 483700
Sales Salaries Expense 79250
Advertising Expense 25000
Depr. Exp. - Store Equipment 4500
Store Supplies Expense 3150
Misc. Selling Expense 1600
Office Salaries Expense 34800
Rent Expense 16000
Insurance Expense 4000
Depr. Exp. - Office Equipment 2800
Office Supplies Expense 1500
Misc. Admin. Expense 1650
Interest Expense 11600
31 Income Summary 127250 *
Robbin Jaeger, Capital 127250 *
31 Robbin Jaeger, Capital 30000 *
Robbin Jaeger, Drawing 30000 *