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*Pr. 3-114—Eight-column work sheet.
The trial balance of Winsor Corporation is reproduced on the following page. The information below is relevant to the preparation of adjusting entries needed to both properly match revenues and expenses for the period and reflect the proper balances in the real and nominal accounts.
Instructions
As the accountant for Winsor Corporation, you are to prepare adjusting entries based on the following data, entering the adjustments on the work sheet and completing the additional columns with respect to the income statement and balance sheet. Carefully key your adjustments and label all items. (Due to time constraints, an adjusted trial balance is not required.) Round all computations to the nearest dollar.
(a)     Winsor determined that one percent of sales will become uncollectible.
(b)     Depreciation is computed using the straight-line method, with an eight year life and $1,000 salvage value.
(c)     Salesmen are paid commissions of 10% of sales. Commissions on sales for the last week of December have not been paid.
(d)     The note was issued on October 1, bearing interest at 8%, due Feb. 1, 2008.
(e)     A physical inventory of supplies indicated $440 of supplies currently in stock.
(f)     Provisions of a lease contract specify payments must be made one month in advance, with monthly payments at $800/mo. This provision has been complied with as of Dec. 31, 2007.

Winsor Corporation

Work Sheet

For the Year Ended December 31, 2007

 

Trial Balance

Adjustments

Income Statement

Balance Sheet

Accounts

Dr.

Cr.

Dr.

Cr.

Dr.

Cr.

Dr.

Cr.

Cash

12,400

Trading Sec.

4,050

Accounts Rec.

50,000

Allow. for D. A.

 

420

Mdse. Inventory

16,800

Supplies

1,040

Equipment

45,000

Accum. Depr.-Eq.

 

9,500

Accounts Payable

 

4,400

Notes Payable

 

5,000

Common Stock

 

40,000

Ret. Earnings

 

34,690

Cost of Goods Sold

225,520

Office Salaries Exp.

20,800

 

Sales Comm. Exp.

29,000

Rent Expense

7,200

Misc. Expense

2,200

Sales

 

 

320,000

Totals

414,010

414,010

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