The unadjusted trial balance of Lakota Freight Co. at March 31, 2019, the end of the year, follows:
Lakota Freight Co. Unadjusted Trial Balance March 31, 2019 Debit Balances Credit Balances
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 12,000 Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 30,000
Prepaid Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 3,600
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 110,000
Accumulated Depreciation Equipment. . . . . . . . . . . . . . . . . . . . . . . . . 17 25,000
Trucks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 60,000
Accumulated Depreciation—Trucks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 15,000 Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 4,000 Kaya Tarango, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 96,000 Kaya Tarango, Drawing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 15,000 Service Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 160,000 Wages Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 45,000 Rent Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 10,600 Truck Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 9,000 Miscellaneous Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 4,800 300,000 300,000
The data needed to determine year-end adjustments are as follows:
a. Supplies on hand at March 31 are $7,500.
b. Insurance premiums expired during the year are $1,800.
c. Depreciation of equipment during the year is $8,350.
d. Depreciation of trucks during the year is $6,200.
e. Wages accrued but not paid at March 31 are $600.
Instructions
1. For each account listed in the trial balance, enter the balance in the appropriate Balance column of a four-column account and place a check mark (✓) in the Posting Reference column.
2. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. Add the accounts listed in part (3) as needed.
3. Journalize and post the adjusting entries, inserting balances in the accounts affected.
Record the adjusting entries on Page 26 of the journal. The following additional accounts from Lakota Freight Co.’s chart of accounts should be used: Wages Payable, 22; Supplies Expense, 52; Depreciation Expense—Equipment, 55; Depreciation Expense—Trucks, 56; Insurance Expense, 57.
4. Prepare an adjusted trial balance.
5. Prepare an income statement, a statement of owner’s equity (no additional investments were made during the year), and a balance sheet.
6. Journalize and post the closing entries. Record the closing entries on Page 27 of the journal. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry.
7. Prepare a post-closing trial balance.
Answer:
1., 3., and 6.
Account No. 11
Post.
Item Ref. Debit Credit Debit Credit
2019
Mar. 31 Balance 12,000
Account No. 13
Post.
Item Ref. Debit Credit Debit Credit
2019
Mar. 31 Balance 30,000
31 Adjusting 26 22,500 7,500
Account No. 14
Post.
Item Ref. Debit Credit Debit Credit
2019
Mar. 31 Balance 3,600
31 Adjusting 26 1,800 1,800
Account No. 16
Post.
Item Ref. Debit Credit Debit Credit
2019
Mar. 31 Balance 110,000
Account No. 17
Post.
Item Ref. Debit Credit Debit Credit
2019
Mar. 31 Balance 25,000
31 Adjusting 26 8,350 33,350
Account No. 18
Post.
Item Ref. Debit Credit Debit Credit
2019
Mar. 31 Balance 60,000
Account No. 19
Post.
Item Ref. Debit Credit Debit Credit
2019
Mar. 31 Balance 15,000
31 Adjusting 26 6,200 21,200
Account No. 21
Post.
Item Ref. Debit Credit Debit Credit
2019
Mar. 31 Balance 4,000
Account No. 22
Post.
Item Ref. Debit Credit Debit Credit
2019
Mar. 31 Adjusting 26 600 600
Account No. 31
Post.
Item Ref. Debit Credit Debit Credit
2019
Mar. 31 Balance 96,000
31 Closing 27 51,150 147,150
31 Closing 27 15,000 132,150
Account No. 32
Post.
Item Ref. Debit Credit Debit Credit
2019
Mar. 31 Balance 15,000
31 Closing 27 15,000 — —
Prob. 4-4A (Continued)
Post.
Item Ref. Debit Credit Debit Credit
2019
Mar. 31 Balance 160,000
31 Closing 27 160,000 — —
Post.
Item Ref. Debit Credit Debit Credit
2019
Mar. 31 Balance 45,000
31 Adjusting 26 600 45,600
31 Closing 27 45,600 — —
Post.
Item Ref. Debit Credit Debit Credit
2019
Mar. 31 Adjusting 26 22,500 22,500
31 Closing 27 22,500 — —
Post.
Item Ref. Debit Credit Debit Credit
2019
Mar. 31 Balance 10,600
31 Closing 27 10,600 — —
Post.
Item Ref. Debit Credit Debit Credit
2019
Mar. 31 Balance 9,000
31 Closing 27 9,000
Post.
Item Ref. Debit Credit Debit Credit
2019
Mar. 31 Adjusting 26 8,350 8,350
31 Closing 27 8,350 — —
Post.
Item Ref. Debit Credit Debit Credit
2019
Mar. 31 Adjusting 26 6,200 6,200
31 Closing 27 6,200 — —
Post.
Item Ref. Debit Credit Debit Credit
2019
Mar. 31 Adjusting 26 1,800 1,800
31 Closing 27 1,800 — —
Post.
Item Ref. Debit Credit Debit Credit
2019
Mar. 31 Balance 4,800
31 Closing 27 4,800
2. Optional (Appendix)
Account Title Debit Credit Debit Credit Debit Credit Debit Credit
Cash 12,00012,00012,000
Supplies 30,000(a) 22,500 7,5007,500
Prepaid Insurance 3,600(b) 1,800 1,8001,800
Equipment 110,000110,000110,000
Accum. Depr.—Equip. 25,000 (c) 8,350 33,35033,350
Trucks 60,00060,00060,000
Accum. Depr.—Trucks 15,000 (d) 6,200 21,20021,200
Accounts Payable4,0004,0004,000
Wages Payable(e) 600 600600
Kaya Tarango, Capital 96,00096,00096,000
Kaya Tarango, Drawing 15,00015,00015,000
Service Revenue160,000160,000 160,000
Wages Expense 45,000 (e) 600 45,600 45,600
Supplies Expense (a) 22,500 22,500 22,500
Rent Expense 10,60010,600 10,600
Truck Expense 9,0009,000 9,000
Depr. Exp.—Equipment (c) 8,350 8,350 8,350
Depr. Exp.—Trucks(d) 6,200 6,200 6,200
Insurance Expense(b) 1,800 1,800 1,800
Miscellaneous Expense 4,8004,800 4,800
300,000 300,000 39,450 39,450 315,150 315,150 108,850 160,000 206,300 155,150
Net income51,15051,150
160,000 160,000 206,300 206,300
3.Page 26
Post.
Ref. Debit Credit
2019
Mar. 31 Supplies Expense 52 22,500
Supplies13 22,500
Supplies used ($30,000 – $7,500).
31 Insurance Expense 57 1,800
Prepaid Insurance 14 1,800
Insurance expired.
31 Depreciation Expense—Equipment 55 8,350
Accumulated Depr.—Equipment 17 8,350
Equipment depreciation.
31 Depreciation Expense—Trucks 56 6,200
Accumulated Depr.—Trucks 19 6,200
Truck depreciation.
31 Wages Expense 51 600
Wages Payable 22 600
Accrued wages.
4.
Account Debit Credit
No. Balances Balances
Cash11 12,000
Supplies13 7,500
Prepaid Insurance14 1,800
Equipment16 110,000
Accumulated Depreciation—Equipment 17 33,350
Trucks18 60,000
Accumulated Depreciation—Trucks 19 21,200
Accounts Payable21 4,000
Wages Payable22 600
Kaya Tarango, Capital 31 96,000
Kaya Tarango, Drawing 32 15,000
Service Revenue41 160,000
Wages Expense51 45,600
Supplies Expense52 22,500
Rent Expense53 10,600
Truck Expense54 9,000
Depreciation Expense—Equipment 55 8,350
Depreciation Expense—Trucks 56 6,200
Insurance Expense57 1,800
Miscellaneous Expense 59 4,800
315,150 315,150
5.
Service revenue$160,000
Expenses:
Wages expense$45,600
Supplies expense22,500
Rent expense10,600
Truck expense9,000
Depreciation expense—equipment 8,350
Depreciation expense—trucks6,200
Insurance expense1,800
Miscellaneous expense4,800
Total expenses108,850
Net income$ 51,150
Kaya Tarango, capital, April 1, 2018$ 96,000
Net income for the year$ 51,150
Withdrawals(15,000)
Increase in owner’s equity36,150
Kaya Tarango, capital, March 31, 2019$132,150
Current assets:
Cash$12,000
Supplies7,500
Prepaid insurance1,800
Total current assets$ 21,300
Property, plant, and equipment:
Equipment$110,000
Less accumulated depreciation 33,350 $76,650
Trucks$ 60,000
Less accumulated depreciation 21,200 38,800
Total property, plant, and equipment115,450
Total assets$136,750
Current liabilities:
Accounts payable$ 4,000
Wages payable600
Total liabilities$ 4,600
Kaya Tarango, capital132,150
Total liabilities and owner’s equity$136,750
6.Page 27
Post.
Ref. Debit Credit
2019
Mar. 31 Service Revenue 41 160,000
Wages Expense 51 45,600
Supplies Expense 52 22,500
Rent Expense 53 10,600
Truck Expense 54 9,000
Depreciation Expense—Equipment 55 8,350
Depreciation Expense—Trucks 56 6,200
Insurance Expense 57 1,800
Miscellaneous Expense 59 4,800
Kaya Tarango, Capital 31 51,150
31 Kaya Tarango, Capital 31 15,000
Kaya Tarango, Drawing 32 15,000
7.
Account Debit Credit
No. Balances Balances
Cash11 12,000
Supplies13 7,500
Prepaid Insurance14 1,800
Equipment16 110,000
Accumulated Depreciation—Equipment 17 33,350
Trucks18 60,000
Accumulated Depreciation—Trucks 19 21,200
Accounts Payable21 4,000
Wages Payable22 600
Kaya Tarango, Capital31 132,150
191,300 191,300
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