Kent Institute Australia

BACT105 Business Accounting

<HW2 > Tutorial Homework for Week 4

Question (analytical) 1 (adopted from Miller-Noble et al 2021)

Preparing a worksheet, financial statements, and closing entries

The unadjusted trial balance of Frank Investment Advisers at 30 June 2021 follows:

Frank Investment Advisers

Unadjusted trial balance
as at 30 June 2021
$ $
Account Balance
Debit Credit
Cash 29,000
Accounts receivable 47,000
Office supplies 5,000
Equipment 21,000
Accumulated depreciation—Equipment 11,000
Accounts payable 16,000
Salaries payable
Unearned revenue 2,000
Loans Payable (non-current) 23,000
Frank, capital 31,000
Frank, withdrawals 27,000
Service revenue 96,000
Insurance expense 3,000
Salaries expense 35,000
Supplies expense
Interest expense 4,000
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 Rent expense 8,000
Depreciation expense—Equipment

Total 179,000 179,000

Adjustment data at 30 June 2021:

 Unearned revenue earned during the year, $100.
 Office supplies used during the period $1,000.
 Depreciation for the year, $7 000.
 Accrued salaries expense, $2 000.
 Accrued service revenue, $6 000.

Requirements:
 Prepare a worksheet for Frank Investment Advisers at 30 June 2021.
 Prepare the income statement, the statement of changes in owners’ equity, and the classified balance sheet in account format.
Assume that there were no contributions made by the owners during the year.
 Prepare closing entries.

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Answer
Requirement 1

FRANK INVESTMENT ADVISERS

Worksheet
30 June 2021
Account Unadjusted trial Adjustments Adjusted trial Income statement Balance sheet
balance balance
Debit Credit   Debit Credit   Debit Credit Debit Credit Debit Credit
Cash 29,000              
Accounts receivable 47,000        
Office supplies 5,000        
Equipment 21,000        
Accum. depn—Equip   11,000        
Accounts payable   16,000        
Salaries payable          
Unearned revenue 2,000        
Loans payable 23,000
Frank, capital   31,000      
Frank, withdrawals 27,000
Service revenue 96,000

Insurance expense 3,000        

Salaries expense 35,000        
Supplies expense          
Interest expense 4,000        
Rent expense 8,000
Depn expense—Equip.      
Total
             
Total            

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Requirement 2

FRANK INVESTMENT ADVISERS

Income statement
for the year ended 30 June 2021
$

FRANK INVESTMENT ADVISERS

Statement of changes in owners’ equity
for the year ended 30 June 2021
$ 

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Requirement 2 (continued)

FRANK INVESTMENT ADVISERS

Balance sheet
as at 30 June 2021
$
Assets
Current assets:

Total current assets

Non-current assets:

Total non-current assets

Liabilities
Current liabilities:

Total current liabilities

Non-current liabilities:

Total non-current liabilities

Net assets

Owners’ equity

Total owners’ equity

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Requirement 3 – Closing entries

Journal
DATE ACCOUNTS AND EXPLANATION DEBIT CREDIT

== End of HW2 Question ===

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