The following account balances pertain to the Jasper Manufacturing Co. at December 31, 20X3 (before adjusting entries). Debit Credit Cash ................................................................................ $300,000 Prepaid Insurance ............................................................. 50,000 Land ................................................................................ 400,000 Accounts Payable ............................................................. 30,000 Common Stock ................................................................. 250,000 Retained Earnings ............................................................. 150,000 Service Revenue ............................................................... 650,000 Wages Expense ................................................................. 150,000 Rent Expense ................................................................... 180,000 Total ................................................................................ $1,080,000 $1,080,000 Additional information: (a)

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The following account balances pertain to the Jasper Manufacturing Co. at December 31, 20X3 (before adjusting entries).

Debit

Credit

Cash ................................................................................

$300,000

Prepaid Insurance .............................................................

50,000

Land ................................................................................

400,000

Accounts Payable .............................................................

30,000

Common Stock .................................................................

250,000

Retained Earnings .............................................................

150,000

Service Revenue ...............................................................

650,000

Wages Expense .................................................................

150,000

Rent Expense ...................................................................

180,000

Total ................................................................................

$1,080,000

$1,080,000

Additional information:

(a)

Prepaid insurance in the trial balance represents an advance payment for 5 months of insurance made on November 1, 20X3.

(b)

In July, the accountant debited accounts payable for a $10,000 fine for a pollution violation; “Environmental Expense” should have been debited.

(c)

Rent expense in the trial balance represents an advance payment for 6 months rent paid on October 1, 20X3. The Company begins occupying the property on that date.

(d)

Unpaid and unrecorded wages earned by employees at December 31, 20X3, were

$60,000.

(e)

Accrue income taxes for 20X3 at 30% on pretax income.

Required:

(1) Prepare to adjust entries to Jasper Co.'s accounts at December 31, 20X3. Each entry should be made in general journal format. Identify each entry by using the letter of the paragraph containing the additional information for the entry.

(2) Prepare the current year's income statement

(3) Prepare the current year balance sheet.

(4) Prepare the closing entries.

Related Book For  answer-question

Financial Accounting

5th edition

Authors: David Spiceland, Wayne M. Thomas, Don Herrmann

ISBN: 978-1259914898