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Preparing a Worksheet, Financial Statements, and Closing Entries

The trial balance of Fugazy Investment Advisers at December 31, 2012, follows:

(see attachment)

Adjustment data at December 31, 2012:
a. Unearned service revenue earned during the year, $500.
b. Supplies on hand, $1,000.
c. Depreciation for the year, $6,000.
d. Accrued salary expense, $1,000.
e. Accrued service revenue, $4,000.

1. Enter the account data in the Trial Balance columns of a worksheet, and complete the worksheet through the Adjusted Trial Balance. Key each adjusting entry by the letter corresponding to the data given. Leave a blank line under Service revenue.
2. Prepare the income statement, the statement of owner's equity, and the classified balance sheet in account format.
3. Prepare closing journal entries from the worksheet.
4. Did the company have a good or a bad year during 2012? Give the reason for your answer. (Challenge)

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Solution Preview

Solution is provided in a separate Excel file attached.It contains following sheets in sequence.

1 Work sheet showing Un-adjusted Trial Balance, Adj Trial balance through Income statement and Balance sheet.

2 Adjusting entries

3 Statements- Income statement, Owners equity and Balance sheet in Account form as desired by you.

4 Closing ...

Solution Summary

The solution prepares a worksheet, financial statements and closing entries.