Question

The following unadjusted trial balance is for Montana Construction Company as of year-end for the December 31, 20x7 fiscal year. The December 31, 20x6 credit balance of the stockholders’ equity account is $46,900, and the stockholders invested $40,000 cash in the company during 20x7.

NO.      Account Title                          Debit               Credit

101      Cash                                         $7,000

126      Supplies                                   $16,000

128      Pre-paid insurance                   $12,600

167      Equipment                               $200,000

168      Accumulated depreciation – equipment $14,000

201      Accounts payable $6,800

251      Long-term notes payable $30,000

301      Stockholders’ equity $86,900

302      Dividends                                 $12,000

401      Demolition fees earned $187,000

623      Wage expense $41,400

633      Interest expense                     $3,300

640     Rent expense                          $13,200

683     Property tax expense               $9,700

684      Repairs expense                      $4,700

690     Utilities expense                      $4,800

TOTALS $324,700         $324,700

Instructions:

b) Using the worksheet, post the adjusting entries using the adjustments column and prepare the adjusted trial balance.

.

Adjustments needed:

The supplies available at the end of fiscal 20x7 year are at a cost of $7,900.

The cost of expired insurance for the fiscal year is $10,600.

Annual depreciation on equipment is $7,000; no other depreciation adjustment was made in 20x7.

The December utilities expense of $800 is not included in the adjusted trial balance because the bill arrived after the trial balance was prepared. The $800 amount owed needs to be recorded.

The company's employees have earned $2000 in accrued wages for the fiscal year.

The rent expense not yet paid or recorded in the fiscal year is $3000.

Additional property taxes of $550 have been assessed for the fiscal year, but have not yet been paid or recorded in the accounts.

The $300 accrued interest for December has not yet been paid and reported.

Montana Construction Co, Adjustments December 31, 20X7
		Unadjusted Trial Balance		Adjustments		Adjusted Trial Balance
Acct #	Account Names	Debit	Credit	Debit	Credit	Debit	Credit
101	Cash	$7,000
126	Supplies	$16,000
128	Prepaid insurance	$12,600
167	Equipment	$200,000
168	Accumulated depreciation - equipment		$14,000
201	Accounts payable		$6,800
251	Long-term notes payable		$30,000
301	Stockholders' equity		$86,900
302	Dividends	$12,000
401	Demolition fees earned		$187,000
623	Wage expense	$41,400
633	Interest expense	$3,300
640	Rent expense	$13,200
683	Property tax expense	$9,700
684	Repair expense	$4,700
690	Utilities expense	$4,800
	TOTALS	$324,700	$324,700	$0	$0	$0	$0

Answer 1

Montana Construction Co, Adjustments December 31, 20X7
		Unadjusted Trial Balance		Adjustments		Adjusted Trial Balance
Acct #	Account Names	Debit	Credit	Debit	Credit	Debit	Credit
101	Cash	$7,000.00				$7,000.00
126	Supplies	$16,000.00			$8,100.00	$7,900.00
128	Prepaid insurance	$12,600.00			$10,600.00	$2,000.00
167	Equipment	$200,000.00				$200,000.00
168	Accumulated depreciation - equipment		$14,000.00		$7,000.00		$21,000.00
201	Accounts payable		$6,800.00				$6,800.00
251	Long-term notes payable		$30,000.00				$30,000.00
301	Stockholders' equity		$86,900.00				$86,900.00
302	Dividends	$12,000.00				$12,000.00
401	Demolition fees earned		$187,000.00				$187,000.00
623	Wage expense	$41,400.00		$2,000.00		$43,400.00
633	Interest expense	$3,300.00		$300.00		$3,600.00
640	Rent expense	$13,200.00		$3,000.00		$16,200.00
683	Property tax expense	$9,700.00		$550.00		$10,250.00
684	Repair expense	$4,700.00				$4,700.00
690	Utilities expense	$4,800.00		$800.00		$5,600.00
	Interest Payable				$300.00		$300.00
	Wages Payable				$2,000.00		$2,000.00
	Rent Payable				$3,000.00		$3,000.00
	Utilities Payable				$800.00		$800.00
	Property tax Payable				$550.00		$550.00
	Supplies Expense			$8,100.00		$8,100.00
	Insurance Expenses'			$10,600.00		$10,600.00
	Depreciation Expenses			$7,000.00		$7,000.00
	TOTALS	$324,700.00	$324,700.00	$32,350.00	$32,350.00	$338,350.00	$338,350.00