Westmoreland Company had the following account balances
December 29, 2017
The cost of equipment purchased by Charleston, Inc., on June 1, 2014, is $89,000. It is estimated that the machine will have a $5,000 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 42,000, and its total production is estimated at 525,000 units. During 2014, the machine was operated 6,000 hours and produced 55,000 units. During 2015, the machine was operated 5,500 hours and produced 48,000 units.
December 29, 2017

The completed financial statement columns of the worksheet for Woods Company, Inc. are shown below

Question
P4-3A The completed financial statement columns of the worksheet for Woods Company, Inc. are shown below.

Problems: Set A 183

Adjusted Account Trial Balance

No. Account Titles Dr. Cr.

130 Prepaid Insurance 4,400

151 Office Equipment 44,000

152 Accumulated Depreciation—Office Equipment 20,000

200 Notes Payable 20,000

201 Accounts Payable 8,000

212 Salaries Payable 2,600

230 Interest Payable 1,000

311 Common Stock 30,000

320 Retained Earnings 6,000

332 Dividends 12,000

400 Service Revenue 77,800

610 Advertising Expense 12,000

631 Supplies Expense 3,700

711 Depreciation Expense 8,000

722 Insurance Expense 4,000

726 Salaries Expense 39,000

905 Interest Expense 1,000

Totals 165,400 165,400

WOODS COMPANY, INC.

Worksheet

For the Year Ended December 31, 2008

Account Income Statement Balance Sheet

No. Account Titles Dr. Cr. Dr. Cr.

101 Cash 8,200

112 Accounts Receivable 7,500

130 Prepaid Insurance 1,800

157 Equipment 28,000

167 Accumulated Depreciation 8,600

201 Accounts Payable 11,700

212 Salaries Payable 3,000

311 Common Stock 20,000

320 Retained Earnings 14,000

332 Dividends 7,200

400 Service Revenue 44,000

622 Repair Expense 5,400

711 Depreciation Expense 2,800

722 Insurance Expense 1,200

726 Salaries Expense 35,200

732 Utilities Expense 4,000

Totals 48,600 44,000 52,700 57,300

Net Loss 4,600 4,600 48,600 48,600 57,300 57,300

Instructions

(a) Prepare an income statement, a retained earnings statement, and a classified balance sheet. No additional common stock was issued during 2008.

(b) Prepare the closing entries.

(c) Post the closing entries and rule and balance the accounts. Use T accounts. Income Summary is account No. 350.
(d) Prepare a post-closing trial balance.

 

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