Exercise 2–19 Requirement 1 Account Title Cash Accounts receivable Prepaid rent Inventory Equipment Accumulated depreciationequipment Accounts payable Wages payable Common stock Retained earnings Sales revenue Cost of goods sold Wage expense Rent expense Depreciation expense Utility expense Advertising expense Unadjusted Trial Balance Dr. Cr. 20,000 35,000 5,000 50,000 100,000 Adjusting Entries Dr. Cr. Adjusted Trial Balance Dr. Cr. 20,000 35,000 5,000 50,000 100,000 30,000 25,000 0 100,000 29,000 323,000 (1) 10,000 40,000 25,000 4,000 100,000 29,000 323,000 180,000 71,000 30,000 0 12,000 4,000 (2) 4,000 180,000 75,000 30,000 10,000 12,000 4,000 (2) 4,000 (1) 10,000 Net Income Totals 2–34 507,000 507,000 14,000 14,000 521,000 521,000 Income Statement Dr. Cr. Balance Sheet Dr. Cr. 20,000 35,000 5,000 50,000 100,000 40,000 25,000 4,000 100,000 29,000 323,000 180,000 75,000 30,000 10,000 12,000 4,000 311,000 12,000 ______ 323,000 ______ _______ 210,000 ______ _______ 198,000 12,000 323,000 323,000 210,000 210,000 Exercise 2–19 (continued) Requirement 2 WOLKSTEIN DRUG COMPANY Income Statement For the Year Ended December 31, 2013 Sales revenue (1) ........................................... Operating expenses: Salaries ...................................................... Supplies (2) ................................................. Rent ........................................................... Insurance (3) .............................................. Miscellaneous (4) ....................................... Depreciation .............................................. Total operating expenses .............. Operating income ......................................... Other expense: Interest (5) ................................................... Net income ................................................... $315,000 $180,000 24,500 12,000 4,000 21,000 10,000 251,500 63,500 1,500 $62,000 2– Solutions Manual, Vol.1, Chapter 2 35 Exercise 2–19 (concluded) WOLKSTEIN DRUG COMPANY Balance Sheet At December 31, 2013 Assets Current assets: Cash ............................................................. Accounts receivable ..................................... Inventory ...................................................... Prepaid rent .................................................. Total current assets .................................. Property and equipment: Equipment .................................................... Less: Accumulated depreciation Total assets ........................................... $ 20,000 35,000 50,000 5,000 110,000 $100,000 (40,000) 60,000 $170,000 Liabilities and Shareholders' Equity Current liabilities: Accounts payable ......................................... Wages payable ............................................. Total current liabilities ............................. Shareholders’ equity: Common stock ............................................. Retained earnings ........................................ Total shareholders’ equity ....................... Total liabilities and shareholders’ equity $ 25,000 4,000 29,000 $100,000 41,000* *Beginning balance of $29,000 plus net income of $12,000. 2–36 141,000 $170,000