The Trial Balance section of the worksheet for Contemporary Fashions for the period ended

December 31, 2019, appears below. Adjustments data are also given.

ADJUSTMENTS

a. Supplies used, $3,600

b. Expired insurance, $2,400

c. Depreciation expense for machinery, $1,200

INSTRUCTIONS

1. Complete the worksheet.

2. Prepare an income statement.

3. Prepare a statement of owner's equity.

4. Prepare a balance sheet.
5. Journalize the adjusting entries in the general journal, page 3.
6. Journalize the closing entries in the general journal, page 4.
7. Prepare a postclosing trial balance.
Analyze: If the adjusting entry for expired insurance had been recorded in error as a credit to Insurance Expense and a debit to Prepaid Insurance for $2,400, what reported net income would have resulted?
Critical Thinking

Transcribed Image Text:

Contemporary Fashlons Worksheet Month Ended December 31, 2019 TRIAL BALANCE ADJUSTMENT ACCOUNT NAME CREDIT CREDIT 1Cash 2 Accounts Receivable 40 8 00 00 90000 200 00 10 8 0000 84 000 00 Supplies 4 Prepaid Insurance 5 Machinery 6Accumulated De 7 Accounts Payable в// Helen Kennedy. Capitol g Helen Kennedy, Drawing 7 (a) 36 00 240 0 200 13 50000 74 5 80 00 6 00000 82 5 00 00 11 Supplies Expense 2 Insurance Expense 13 Salaries Expense 14 Depreciation Expense-Machinery 15 Utilities Expense 16 lotals a)3 600 00 (b) 2 1200 00 68 0 00 70 5 8000 7 200