Blazin Sevens Worksheet For The Month Ended December 31, 20X

Blazinsevensworksheetfor The Month Ended December 31 20xxunadjustedad

Analyze the financial data for Blazinsevens for the month ended December 31, 20xx, including unadjusted balances, adjustments, and trial balances. Prepare a comprehensive financial statement, including adjusted income statement, balance sheet, and owner's equity statement. Record the necessary adjusting journal entries, close the revenue and expense accounts, and prepare the final trial balance. Ensure that all account balances are accurately reflected, and make appropriate journal entries for depreciation, accrued expenses, and other adjustments necessary for accurate financial reporting.

Sample Paper For Above instruction

Introduction

The purpose of this report is to prepare the financial statements and necessary adjusting and closing entries for Blazinsevens for the month ending December 31, 20xx. The data includes unadjusted balances, which require adjustments such as depreciation, accrued expenses, and revenues to ensure adherence to generally accepted accounting principles (GAAP). This process involves analyzing account balances, recording adjustments, preparing adjusted trial balances, and final financial statements, including the income statement, balance sheet, and statement of owner’s equity.

Unadjusted Trial Balance Analysis

The unadjusted trial balance for Blazinsevens presents the initial balances in various accounts. Key balances include cash at $2,090, accounts receivable at $4,100, office supplies at $400, prepaid insurance at $900, delivery equipment at $8,000, and several liability and equity accounts. Notably, accumulating depreciation and various expenses are initially recorded as zero, indicating the need for adjustments. The income statement accounts, like service revenue of $6,600 and wages expense of $900, form the basis for determining net income after adjustments.

Adjustments

Adjustments are crucial for accurate financial statements. In this scenario, typical adjustments include depreciation expense for delivery equipment, accrued wages, and possibly supplies and insurance expenses. For example, suppose delivery equipment depreciates $800 annually, and this depreciation expense should be recognized monthly. Additionally, wages payable may accrue wages earned but not yet paid, requiring an adjustment. Supplies used during the month would reduce supplies on hand, and prepaid insurance must be adjusted for the month's expense.

Journal Entries for Adjustments

• Depreciation Expense – Delivery Equipment: Dr. $800; Cr. Accumulated Depreciation $800
• Wages Expense: Dr. $900; Cr. Wages Payable $900
• Office Supplies Expense: Dr. $200; Cr. Office Supplies $200
• Insurance Expense: Dr. $75; Cr. Prepaid Insurance $75

These entries ensure expenses are recognized in the period incurred, matching revenues and expenses appropriately.

Adjusted Trial Balance

After posting adjustments, the trial balance updates account balances. For example, accumulated depreciation increases to $800, wages payable becomes $900, supplies expense increases, and insurance expense is recognized. These adjustments modify the totals of assets, liabilities, and equity, providing a foundation for preparing financial statements.

Financial Statements Preparation

Income Statement

The adjusted income statement reflects total revenues and expenses, leading to the net income for the period. Assuming service revenue remains at $6,600, and expenses summed include wages, depreciation, supplies, and insurance, the net income can be calculated accordingly. For example, total expenses might sum to $2,075, resulting in net income of $4,525.

Owner's Equity Statement

The statement of owner’s equity starts with the opening capital of $7,000, adds net income, and subtracts drawings of $430, resulting in ending capital of $13,095.

Balance Sheet

The balance sheet reports current assets such as cash, receivables, supplies, and prepaid insurance, along with delivery equipment net of depreciation. Liabilities include accounts payable and wages payable. Owner’s equity reflects the ending capital balance. These figures ensure the accounting equation (Assets = Liabilities + Owner’s Equity) holds.

Closing Entries

• Close Service Revenue: Dr. Service Revenue $6,600; Cr. Income Summary $6,600
• Close Expenses: Dr. Income Summary (sum of expenses) $5,075; Cr. Wages Expense, Depreciation Expense, Supplies Expense, Insurance Expense accordingly
• Close Income Summary to Owner's Capital: Dr. Income Summary $1,525; Cr. A.M.Vegas, Capital $1,525
• Close Drawings: Dr. A.M.Vegas, Capital $430; Cr. A.M.Vegas, Drawing $430

Conclusion

Completing this accounting cycle ensures that the financial statements accurately reflect Blazinsevens' financial position and performance for the period ending December 31, 20xx. Proper adjustments, journal entries, and closing procedures are essential for compliance with accounting standards and provide valuable insights to stakeholders.

References

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