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Comprehensive Accounting Cycle Review Problem

Student Name: James Fair


Complete the Comprehensive Problem, beginning on page 2, on the included work papers.
A solution to this problem is not available for your reference, by design. It is time for you to complete a problem on your
own. The following check figures are provided:
Unadjusted Trial Balance
Adjusted Trial Balance
Net Income
Total Assets
Post-Closing Trial Balance

$101,920
$102,175
$13,465
$92,260
$92,440

Comprehensive Accounting Cycle Review Problem


On December 1st Curt Williamson began an auto repair shop, Williamsons Quality Automotive. The following information
about Decembers transactions, accounts, and adjustment data is available.
Transactions

Dec.
1
1
9
10
19
22
26
28
31
31
31
31

1 Williamson contributed $50,000 cash to the business in exchange for capital.


Purchased $10,800 of equipment paying cash.
Paid $4,500 for a 9-month insurance policy starting on December 1.
Paid $18,000 cash to purchase land to be used in operations.
Purchased office supplies on account, $3,000.
Borrowed $28,000 from the bank for business use. Williamson signed a note payable to the bank in the
name of the business.
Paid $800 for advertising expenses.
Paid $1,000 on account.
The business received a bill for utilities to be paid in January, $280.
Revenues earned during the month included $17,500 cash and $2,700 on account.
Paid employees' salaries $3,600 and building rent $700. Record as a compound entry.
The business received $1,440 for auto screening services to be performed next month.
Williamson withdrew cash of $3,000.

Accounts
Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Equipment; Accumulated
Depreciation-Equipment; Land; Accounts Payable; Utilities Payable; Interest Payable; Unearned Revenue; Notes
Payable; Williamson, Capital; Williamson, Withdrawals; Service Revenue; Salaries Expense; Rent Expense; Utilities
Expense; Advertising Expense; Supplies Expense; Insurance Expense; Interest Expense; and Depreciation ExpenseEquipment.
Adjustment Data
a. Office Supplies used during the month, $600.
b. Depreciation for the month, $180.
c. One month insurance has expired.
d. Accrued Interest Expense, $75.
Requirements:
Complete the following on the attached work papers
1.
2.
3.
4.
5.

Prepare the journal entries and post to the T-accounts.


Prepare an unadjusted trial balance.
Prepare the adjusting entries and post to the T-accounts.
Prepare an adjusted trial balance.
Prepare the income statement, the statement of owner's equity, and a classified balance sheet. Use proper
formatting techniques including headings, dollar signs, and underlining.

6.
7.

Prepare the closing entries and post to the T-accounts.


Prepare a post-closing trial balance.

GENERAL JOURNAL
DATE

ACCOUNT TITLES AND EXPLANATION

DEBIT

CREDIT

Record Transactions, Adjusting Entries, Closing Entries in this journal


Dec. 1

Dec. 1

Dec. 1

Dec. 9

Cash
Williamson Capital
Owner Contribution

$50,000

Equipment
Cash
Purchased Equipment

10,800

Pre-paid Insurance
Cash
Paid rent in advance

4,500

Land
Cash
Paid cash for land

18,000

$50,000

10,800

4,500

18,000

Dec. 10 Office Supplies


Accounts Payable
Purchased office supplies on account

3,000

Dec. 19

Cash
Notes Payable
Collected cash on note

28,000

Advertising Expense
Cash
Paid cash expense

800

Accounts Payable
Cash
Paid cash on account

1,000

Utilities Expense
Cash
Paid Cash Expense

280

Dec. 22

Dec. 26

Dec. 28

3,000

28,000

800

1,000

280

GENERAL JOURNAL
DATE
Dec. 31

Dec. 31

Dec. 31

Dec. 31

ACCOUNT TITLES AND EXPLANATION

DEBIT

Cash
Accounts Payable
Service Revenue
Performed services collected cash and account credit.

17,500
2,700

Salaries expense
Rent Expense
Cash
Paid cash expenses

3,600
700

Cash
Unearned revenue
Collected cash for future services.

1,440

Williamson, withdrawals
Cash
Owner Withdrawal

3,000

CREDIT

20,200

4,300

1,440

3,000

GENERAL LEDGER

Cash

50,000

10,800

28,000

4,500

17,500
1,440

Accounts Receivable

Office Supplies

Prepaid Insurance

2,700

4,500

3,000

18,000
800
1,000 &

280

4,300 & 3,000

Equipment
10,800
1,000

Accumulated Depreciation Equip.

Accounts Payable

18,000

3,000

Utilities Payable

Land

Interest Payable

Unearned Revenue

Notes Payable-Williamson

1,440

28,000

Capital-Williamson
50,000

Withdrawals

Service Revenue

3,000

20,200

Salaries Expense
3,600

Rent Expense
700

Insurance Expense

Utilities Expense

Advertising Expense

280

Supplies Expense

800

Interest Expense

Depreciation Exp. Equip.

Income Summary

Unadjusted Trial Balance


Williamson Quality Automotive
Unadjusted Trial Balance
Month End December 31st

Debits
Cash
Office Supplies
Prepaid Insurance
Equipment
Land
Accounts Payable
Rent Expense
Unearned revenue

Credits

$54,260
3,000
4,500
10,800
18,000
2000
800
1,440
28,000
50,000

Notes Payable-Williamson
Capital - Capital-Williamson
Williamson (Withdrawals)
Service Revenue
Salaries expense
Advertising Expense
Utilities expense
Accounts Receivable
Total

3,000
20,200
3,600
800
280
2700
$101,920 $101,920

Adjusted Trial Balance


Williamson Quality Automotive
Adjusted Trial Balance
Month End December 31st

Debits
Cash
Office Supplies
Prepaid Insurance
Accumulated Depreciation - Insurance
Equipment
Accumulated Depreciation Equipment
Land
Accounts Payable
Unearned revenue

Credits

$54,260
2,400
4,500
500
10,800
180
18,000
2,000
1,440
28,000
50,000

Notes Payable-Williamson
Capital - Capital-Williamson
Williamson (Withdrawals)
Service Revenue
Rent Expense
Salaries expense
Advertising Expense
Utilities expense
Accounts Receivable
Depreciation Expense - Insurance
Depreciation Expense Equipment
-Supplies Expense
Interest Expense
Total

3,000
20,200
800
3,600
800
280
2700
500
180
600
75
$102,175 $102,175

Income Statement

Williamson Quality Automotive


Income Statement
Month End December 31st

Revenues:
Service Revenue

20,200

Expenses:
Salaries expense
Advertising Expense
Utilities expense
Accounts Receivable
Depreciation Expense - Insurance
Depreciation Expense Equipment
Supplies Expense
Interest Expense
Rent Expense
Total Expenses
Net Income

3,600
800
280
2700
500
180
600
75
800
$9,535
$10,665

Statement of Changes in Owners Equity


Williamson Quality Automotive
Owners Equity
Month End December 31st

Williamson Capital December 1


Owner Contribution
Net Income for the month

0
50,000
10,665
60,665
(3,000)
$57,665

Owner Withdrawal
Williamson Capital December 31

Balance Sheet
Williamson Quality Automotive
Balance Sheet
Month End December 31st

Assets
Cash
Office Supplies
Prepaid Insurance
Accum. Dep. Insurance
Land
Equipment
Accum. Dep. Equipment
Total Assets

$54,260
2,400
4,500
(500)
18,000
10,800
(180)
$89,280

Liabilities
Accounts Payable
2,000
Unearned
revenue
Notes Payable-Williamson

1,440
28,000
5
0

Total Liabilities
$31,440

Owners Equity
Williamson Capital
Total Liabilities & Owners Equity

$57,665
$89,280

Post-Closing Trial Balance


Williamson Quality Automotive
Post-Closing Trial Balance
Month End December 31st

Debits
Cash
Office Supplies
Prepaid Insurance
Accumulated Depreciation - Insurance
Equipment
Accumulated Depreciation Equipment
Land
Accounts Payable
Unearned revenue

Credits

$54,260
2,400
4,500
500
10,800
180
18,000

Notes Payable-Williamson
Capital - Capital-Williamson
Total:

$92,440

10

2,000
1,440
28,000
50,000
$92,440