Preparing Balance Sheets and Statements

1.     CheckPoint: Preparing Balance Sheets and Statements

·         Resource: Fundamental Accounting Principles, pp. 156 & 159

·         Complete Quick Study question 4-2 on p. 156 and Exercises 4-4 & 4-5 on p. 159.

·         Post your answers as an attachment.

QS  4-2

List the following steps of the accounting cycle in their proper order

F. Analyzing transactions and events

I. Journalizing transactions and events.

B. Posting the journal entries.

H. Preparing the unadjusted trial balance

C. Journalizing and posting adjusting entries.

D. Preparing the adjusted trail balance.

G  Preparing the financial statements.

E. Journalizing and posting closing entries.

A Preparing the post-closing trial balance

Exercise 4-4

Preparing a classified balance sheet

				Webb Trucking Company
				Balance Sheet
				31-Dec-05
			Assets
Current assets
	Cash					7000
	Accounts Receivable					16500
	Office supplies					2000
	Total current assets					25500
Plant Assets
	Trucks				170000
	Less: accumulated depreciation - trucks				-35000
	Land				75000
	Total Plant Assets					210000
Total Assets						235500
			Liabilities
Current Liabilities
	Accounts Payable					11000
	Interest Payable					3000
Long-term Liabilities
	long-term notes payable					52000
Total Liabilities						66000
			Equity
K. Webb, Capital						169500
Total liabilities and Equity						235500

Exercise 4-5

Preparing the financial statements

1)      Income Statement

Income Statement
				Webb Trucking Company
				Income Statement
				For December 31, 2005
Revenues
	Trucking fees earned				128000
	total revenue					128000
Expenses
	depreciation expense				22500
	Salaries expense				60000
	Office supplies expense				7000
	repairs expense -trucks				11000
	Total expenses					100500
Net income						27500

2)      Statement of Owner’s Equity

Balance Sheet
				Webb Trucking Company
				Statement of Changes in Owner's Equity
				For Dec 31, 2005
K. Webb, Capital for December 31, 2004						161000
add: Investment by Owner					0
	Net Income				27500	27500
						188500
Less: Withdrawals by owner						19000
K. Webb, Capital for December 31, 2005						169500