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Question: the following unadjusted trial balance is for groenke construction company...

Question details

The following unadjusted trial balance is for Groenke 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 $50,500, and the stockholders invested $45,000 cash in the company during 20x7.

  1. Account Title Debit                     Credit

101         Cash                                                      $15,000

126         Supplies                                               $8,500

128         Pre-paid insurance                          $11,200

167         Equipment                                          $175,000

168         Accumulated depreciation – equipment                 $19,000

201         Accounts payable                                                               $9,250

251         Long-term notes payable                                               $45,000

301         Shareholders’ equity                                                      $106,900

302         Dividends                                            $15,750

401         Construction Revenue                                                   $153,000

623         Wage expense                                  $61,800

633         Interest expense                               $6,250

640         Rent expense                                    $15,750

683         Property tax expense                    $12,500

684         Repairs expense                                $6,100

690         Utilities expense                                $5,300

TOTALS                                                            $333,150                  $333,150

Instructions:

Use the template provided to:

  1. Journalize the following adjusting entries as of fiscal year-end December 31, 20x7.
  2. Post the adjusting entries to an unadjusted trial balance and prepare the adjusted trial balance.
  3. Create financial statements, namely: i) the income statement, ii) statement of stockholders’ equity, and iii) the balance sheet for 20x7.

Adjustments needed:

  1. The supplies available at the end of the fiscal year 20x7 are at a cost of $5,700.
  2. The company's employees have earned $3.500 in accrued wages for the fiscal year.
  3. The cost of expired insurance for the fiscal year is $8,600.
  4. The rent expense not yet paid or recorded in the fiscal year is $2,250.
  5. Annual depreciation on equipment is $8,000; no other depreciation adjustment was made in 20x7.
  6. The $450 accrued interest for December has not yet been paid and reported.
  7. Additional property taxes of $625 have been assessed for the fiscal year but have not yet been paid or recorded in the accounts.
  8. The December utilities expense of $425 is not included in the adjusted trial balance, because the bill arrived after the trial balance was prepared. The $425 amount owed needs to be recorded.
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