PROBLEM 1 : CIELO COMPANY
CIELO COMPANY
WORKING TRIAL BALANCE
FOR THE YEAR ENDED SEPTEMBER 30, 2018
Cash
Accounts Receivable
Allowance for Doubtful acct.
Notes Receivable
Merchandise Inventory
Furniture and Equipment
Accumulated Depreciation
Goodwill
Accounts payable
Notes payable
Common stocks
Retained Earnings
Sales
Sales Return and Allowances
Purchase
Purchase Return and Allowan.
Advertising Expense
Sale salaries
Commission Expense
Miscellaneous selling expense
Rent Expense
Office salaries
Light and Water
Insurance Expense
Taxes and Licenses
General Expenses
Interest Expenses
Interest Income
Total
Doubtful Accounts Expenses
Cost of Good sold
TRIAL BALANCE
DEBIT
CREDIT
225,000
936,000
31,900
155,000
568,900
618,000
187,500
300,000
536,000
100,000
1,000,000
552,500
3,728,200
47,600
2,159,300
36,500
96,100
288,500
152,000
29,900
130,000
197,200
15,000
10,800
47,800
163,400
41,200
9,100
6,181,700
6,181,700
ADJUSTMENT
DEBIT
15,000
11,000
300,000
50,000
36,500
15,650
2,120,500
Merchandise Inventory
Gain on sale of Equipment
Depreciation Expense
Prepaid Insurance
Prepaid Rent
Discount on notes payable
Total
Income before income tax
Income before income tax
Income tax Expense
Income tax payable
Profit
621,200
64,300
4,200
10,000
11,000
3,259,350
LO COMPANY
RKING TRIAL BALANCE
ENDED SEPTEMBER 30, 2018
ADJUSTMENT
CREDIT
15,000
PROFIT AND LOSS
DEBIT
CREDIT
15,650
568,900
5,000
64,300
300,000
50,000
613,000
240,800
586,000
100,000
1,000,000
252,500
3,728,200
47,600
2,209,300
10,000
4,200
11,000
FINANCIAL POSITION
DEBIT
CREDIT
210,000
951,000
47,550
155,000
96,100
288,500
152,000
29,900
120,000
197,200
15,000
6,600
47,800
163,400
30,200
9,100
15,650
2,120,500
621,200
6,000
6,000
64,300
4,200
10,000
11,000
3,259,350
3,394,750
348,550
3,743,300
3,743,300
3,743,300
348,550
104,565
243,985
348,550
348,550
2,575,400
104,565
243,985
2,575,400
Audit Adjusting Entries:
Accounts receivable
Cash in Bank
15,000
15,000
Doubtful Accounts Expenses
Allowance for Doubtful Accounts
15,650
Purchases
Accounts payable
50,000
15,650
50,000
Cost of Goods Sold
Inventory, end ( 601,200 + 50,000 - 30,000 )
Purchase Returns and Allowances
Purchase ( 2,159,300 + 50,000 )
Inventory, Beginning
Accumulated Depreciation Equipment
Gain on sale of Equipment
Furniture and Equipment ( 40,000 - 35,000 ).
2,120,500
621,200
36,500
2,209,300
568,900
*11,000
6,000
11,000
* 40,000 × 10 % × 2.75 Years ) = 11,000
32,000 / 80 % Remaining Life at 10/1/13 = 40,000
Depreciation Expense - Furniture and Equipment
Accumulated Depreciation - Furniture and Equipment
Furniture and Equipment ,per client
Adjustment above
Furniture and Equipment ,per audit
Depreciation Expense :
on Remaining Equipment 613,000 × 10 %.
on Remaining Equipment sold 40,000 × 10 % × 9 /12
Depreciation for the year
64,300
64,300
618,000
(5,000)
613,000
61,300
3,000
64,300
Prepaid insurance (8,400 x 6/12)
Insurance expense
4,200
4,200
Prepaid Rent 130,000 × 1/13
Rent Expense
10,000
Discount on notes payable
Internet Expense
10,000 × 12% × 11/12
11,000
Retained Earnings
Goodwill
10,000
11,000
300,000
300,000