Question

The unadjusted trial balance of Property Incorporated appears below as of December 31, 2019

Property Incorporated

Unadjusted Trial Balance

December 31, 2019

	Debit	Credit
Cash	$274,750
Accounts Receivable	120,000
Prepaid insurance	11,250
Supplies	37,500
Plant	140,000
Accumulated Depreciation – plant		$   14,000
Accounts Payable		82,500
Unearned Service revenue		73,500
Common stock		207,500
Retained Earnings		127,500
Dividends	7,500
Service revenue		198,500
Salary expense	61,500
Utilities expense	27,000
Rent expense	15,000
Postage	9,000
	$703,500	$703,500

Additional data are as follows:

• Supplies used during the current year amount to $25,250
• Accrued salaries on December 31, 2019, amount to $3,750
• Unearned service revenue earned during the year amounts to $26,250
• Depreciation for the current year amounts to $5,000
• Prepaid insurance expired as of December 31, 2019, amounts to $5,500

Based on the unadjusted trial balance and the additional data:

Prepare for property Incorporated:

1. The adjusting entries necessary to account for the additional information
2. The adjusted Trial Balance
3. The following Financial Statements for the year ended December 31, 2019

• Income Statement
• Statement of Retained Earnings
• Balance Sheet

Answer 1

solution (a) E Adjusting Entries No. Account title, Debit ($) Credit C$) 1.1 2. 2 Supplies Expense 25,250 supplies 25,250 Salary Expense 33,750 accrued salary 13,750 unearned service Revenue 26, 250 o Service Revenue 26,250 lepreciation expense se 15000 Accumulated dep. 5000 Insurance expense 5,500 Prepaid 9 Insurance 5,500 y,

mollw solution (b) The adjusted Trial Balance Rebit Credit Allaunt title Cash cias 274,750 Allount Receivable 120,000 Prepaid Insurance 5750 ( 11,250 – 5500) Insurance Expense (5500 Supplies (37500 - 25250)42,250 Supplies Expense 125,250 Plant 140,000 Accumulated dep. (14000+5000) cepreciation Expense | 5,000 Account Payable unearned Service Revenue ( 73,500 - 26250) Sexxtcodeserye Common stock Retained earning Dividend 7500 service Revenue (198500 +26,250) 19000 82,500 47250 207,500 127,500 1224, 750

Account title Credit C $) lebit ( $) 65,250 Salary expense (61,500 +3750) susued salary utilities Expense 13750 Switcot 27,000 115,000 Rent Expense Postage 22 9,000 Total 2 712,250 712, 250-

من ورا 7 Less: $1 to -Income statement (2+2+02:18 Amount Particulars OD Service Revenues 224,750 Expenses - Insurance Expense 5500 Supplies Expense 25250 Repreciation 5000 Salary expense 65,250 utilities expense 27,000 Reat Expense 15,000 Postage 9,000 1 152,000 Net Income 72,750 Statement of stockholder's Equity Particulars Common Stock C$) 207,500 Retained Earnings ($) Total Equity Balance Net Income Dividends Ending Balance 127500 72,750 (7,500) 192,750 335,000 172750 (troo) 400, 250 207,500

Balance sheet Amount ($ 274,750 120,000 5750 12,250 Assets to Cussent assets. - Cash Account Receivable Prepaid Insurance supplies - Non-Cussent assets Plant 140,000 less! Accumulated (19000) eep. I Total assets liabilities current liabilities Account Payable unearned service Revenue accrued salary 121,000 533,750 Amount ($) 82,500 47,250 3750 Equity Common stock $ 207500 Retained Earnings $ 192,750 400, 250 1533,750 Total liabilities