GWS Incorporated Accountant's Worksheet for September 30, 2010, detailing financial adjustments and statements.

Problem Analysis

The provided image is an Accountant's Worksheet for GWS Incorporated as of September 30, 2010. The worksheet is used to prepare financial statements (Income Statement, Retained Earnings Statement, and Balance Sheet) by adjusting the unadjusted trial balance entries. The task involves analyzing the adjustments and preparing the final financial statements.

Key Components of the Worksheet

1. Unadjusted Trial Balance: Initial balances before any adjustments.
2. Adjustments: Entries to correct or update accounts for accruals, deferrals, and other necessary adjustments.
3. Adjusted Trial Balance: Balances after applying adjustments.
4. Income Statement Accounts: Revenue and expense accounts that affect net income.
5. Retained Earnings Statement Accounts: Dividends declared and net income.
6. Balance Sheet Accounts: Assets, liabilities, and equity accounts.

Step-by-Step Solution

#### 1. Analyze Adjustments
The adjustments are recorded in the "Adjustments" columns. These adjustments affect both the Income Statement and Balance Sheet accounts. Let's break them down:

- Supplies Expense: $4,200 (debit) is recorded as an expense, reducing the Supplies account.
- Prepaid Insurance: $3,900 (credit) reduces the Prepaid Insurance account, recognizing expired insurance.
- Accumulated Depreciation: $5,800 (credit) increases Accumulated Depreciation, recognizing depreciation expense.
- Unearned Revenue: $2,000 (debit) reduces Unearned Revenue, recognizing revenue earned.
- Insurance Expense: $28,000 (debit) recognizes the total insurance expense for the period.
- Supplies Expense: $14,400 (debit) recognizes the total supplies expense for the period.
- Interest Payable: $6,000 (credit) recognizes accrued interest payable.
- Property Taxes Payable: $3,000 (credit) recognizes accrued property taxes payable.

#### 2. Prepare the Adjusted Trial Balance
The adjusted trial balance is calculated by adding or subtracting the adjustments from the unadjusted trial balance. For example:
- Cash: Remains $37,000 (no adjustment).
- Supplies: $18,600 - $4,200 = $14,400.
- Prepaid Insurance: $31,900 - $3,900 = $28,000.
- Accumulated Depreciation: $36,200 + $5,800 = $42,000.
- Unearned Revenue: $2,700 - $2,000 = $700.
- Consulting Revenue: $278,500 + $28,000 = $280,500.
- Salaries Expense: $109,000 + $14,400 = $123,400.
- Repair Expense: $30,500 (no adjustment).
- Advertising Expense: $9,400 (no adjustment).
- Utilities Expense: $16,900 (no adjustment).
- Property Tax Expense: $18,000 + $3,000 = $21,000.
- Interest Expense: $6,000 + $6,000 = $12,000.

#### 3. Prepare the Income Statement
The Income Statement shows revenues and expenses to calculate net income:
- Revenue: Consulting Revenue = $280,500.
- Expenses:
- Salaries Expense = $123,400
- Repair Expense = $30,500
- Advertising Expense = $9,400
- Utilities Expense = $16,900
- Property Tax Expense = $21,000
- Interest Expense = $12,000
- Insurance Expense = $28,000
- Supplies Expense = $14,400
- Depreciation Expense = $5,800

Total Expenses = $123,400 + $30,500 + $9,400 + $16,900 + $21,000 + $12,000 + $28,000 + $14,400 + $5,800 = $261,400.

Net Income = Revenue - Total Expenses = $280,500 - $261,400 = $19,100.

#### 4. Prepare the Retained Earnings Statement
The Retained Earnings Statement shows changes in retained earnings:
- Beginning Retained Earnings: $109,700.
- Add: Net Income: $19,100.
- Less: Dividends Declared: $14,000.

Ending Retained Earnings = $109,700 + $19,100 - $14,000 = $114,800.

#### 5. Prepare the Balance Sheet
The Balance Sheet shows assets, liabilities, and equity:
- Assets:
- Cash = $37,000
- Supplies = $14,400
- Prepaid Insurance = $28,000
- Land = $80,000
- Equipment = $120,000
- Less: Accumulated Depreciation = ($42,000)

Total Assets = $37,000 + $14,400 + $28,000 + $80,000 + $120,000 - $42,000 = $237,400.

- Liabilities:
- Account Payable = $14,200
- Interest Payable = $6,000
- Property Taxes Payable = $3,000

Total Liabilities = $14,200 + $6,000 + $3,000 = $23,200.

- Equity:
- Common Stock = $50,000
- Retained Earnings = $114,800

Total Equity = $50,000 + $114,800 = $164,800.

Total Liabilities and Equity = $23,200 + $164,800 = $188,000.

#### Final Answer
The final financial statements are as follows:

- Income Statement:
- Net Income: $19,100

- Retained Earnings Statement:
- Ending Retained Earnings: $114,800

- Balance Sheet:
- Total Assets: $237,400
- Total Liabilities: $23,200
- Total Equity: $164,800

Thus, the final answer is:

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