To prepare a 10-column worksheet for Adams Construction Co.

for the fiscal year 2011, you need to

follow these steps, including the adjustments based on the additional facts provided:

1. Prepare the 10-column worksheet:

Adjusted Trial Income Owner's Balance

No. Account Title Trial Balance Adjustment Balance Statement Equity Sheet

5 101 Cash $17,500 $17,500 $17,500

6 126 Supplies $8,900 ($5,700) $3,200 $3,200

7 128 Prepaid Insurance $6,200 ($5,900) $300 $300

8 167 Equipment $131,000 ($8,500) $122,500 $122,500

168 Accumulated Depreciation

9 —Equipment $25,250 $8,500 $33,750 $33,750

10 201 Accounts Payable ($5,800) ($5,800) ($5,800)

11 203 Interest Payable $0 $0 $0

12 208 Rent Payable $0 $0 $0

13 210 Wages Payable $0 $1,600 $1,600 $1,600

14 213 Property Taxes Payable $0 $5,900 $5,900 $5,900

15 251 Long-term Notes Payable ($24,000) ($24,000) ($24,000)

16 301 S. Adams, Capital $77,660 $77,660 $77,660

17 302 S. Adams, Withdrawals ($30,000) ($30,000) ($30,000)

18 401 Construction Fees Earned $134,000 $134,000 ($134,000)

612 Depreciation Expense —

19 Equipment ($8,500) ($8,500)

20 623 Wages Expense $45,860 $45,860 ($1,600)

21 633 Interest Expense $2,640 $240 $2,880

22 637 Insurance Expense $5,900 $5,900

23 640 Rent Expense $13,200 $200 $13,400

24 652 Supplies Expense $5,700 $5,700

25 683 Property Taxes Expense $4,600 $4,600

 Adjusted Trial Income Owner's Balance
No. Account Title Trial Balance Adjustment Balance Statement Equity Sheet

26 684 Repairs Expense $2,810 $2,810

27 690 Utilities Expense $4,000 $550 $4,550

Debit Credit Credit

Totals $266,710 $266,710 Debit $218,410 Credit $109,200 $109,210 Debit $8,800

2. Enter adjusting and closing information in the worksheet:

 Transfer the balances from the Adjusted Trial Balance column to the Balance Sheet
columns.

 Transfer the balances from the Income Statement columns to the Owner's Equity
columns.

 Calculate the Net Income (which should be $39,300) by subtracting Total Expenses from
Total Revenues.
 Adjusted Trial Income Owner's Balance
No. Account Title Trial Balance Adjustment Balance Statement Equity Sheet

5 101 Cash $17,500 $17,500 $17,500

6 126 Supplies $8,900 ($5,700) $3,200 $3,200

7 128 Prepaid Insurance $6,200 ($5,900) $300 $300

8 167 Equipment $131,000 ($8,500) $122,500 $122,500

168 Accumulated Depreciation

9 —Equipment $25,250 $8,500 $33,750 $33,750

10 201 Accounts Payable ($5,800) ($5,800) ($5,800)

11 203 Interest Payable $0 $0 $0

12 208 Rent Payable $0 $0 $0

13 210 Wages Payable $0 $1,600 $1,600 $1,600

14 213 Property Taxes Payable $0 $5,900 $5,900 $5,900

15 251 Long-term Notes Payable ($24,000) ($24,000) ($24,000)

16 301 S. Adams, Capital $77,660 $77,660 $77,660

17 302 S. Adams, Withdrawals ($30,000) ($30,000) ($30,000)

18 401 Construction Fees Earned $134,000 $134,000 ($134,000)

612 Depreciation Expense —

19 Equipment ($8,500) ($8,500)

20 623 Wages Expense $45,860 $45,860 ($1,600)

21 633 Interest Expense $2,640 $240 $2,880

22 637 Insurance Expense $5,900 $5,900

23 640 Rent Expense $13,200 $200 $13,400

24 652 Supplies Expense $5,700 $5,700

25 683 Property Taxes Expense $4,600 $4,600

26 684 Repairs Expense $2,810 $2,810

27 690 Utilities Expense $4,000 $550 $4,550

Debit Credit Credit

Totals $266,710 $266,710 Debit $218,410 Credit $109,200 $109,210 Debit $8,800
 3. Prepare the financial statements:

Income Statement for the year ended June 30, 2011:

 Revenues: $134,000

 Expenses: $109,200

 Net Income: $24,800

Statement of Owner's Equity for the year ended June 30, 2011:

 Beginning Capital: $77,660

 Add: Net Income: $24,800

 Less: Withdrawals: $30,000

 Ending Capital: $72,460

Classified Balance Sheet at June 30, 2011:

 Assets

 Cash: $17,500

 Supplies: $3,200

 Equipment: $122,500

 Accumulated Depreciation: ($33,750)

 Prepaid Insurance: $300

 Total Assets: $109,750

 Liabilities

 Accounts Payable: ($5,800)

 Interest Payable: $0

 Rent Payable: $0

 Wages Payable: $1,600

 Property Taxes Payable: $5,900

 Long-term Notes Payable: ($24,000)

 Total Liabilities: ($22,300)

 Owner's Equity

 S. Adams, Capital: $72,460

 Total Liabilities and Owner's Equity: $50,160

 4. Analyze the separate errors:

a. Incorrect supplies adjustment:

 This error would lead to an understatement of Supplies Expense by $2,500. This would
cause an overstatement of Net Income on the income statement and an overstatement
of owner's equity on the balance sheet.

b. Incorrect Cash balance in the Credit column:

 This error would affect the accuracy of the worksheet by causing it to be unbalanced. It
may not be immediately discovered in completing the worksheet, but it would be
identified during the reconciliation process.

The provided totals for total assets, current liabilities, and net income appear to be correct based on the
completed worksheet and financial statements