Question

The adjusted trial balance for China Tea Company at December 31, 2021, is presented below:

Accounts	Debit				Credit
Cash	$	11,000
Accounts receivable		150,000
Prepaid rent		5,000
Supplies		25,000
Equipment		300,000
Accumulated depreciation					$	135,000
Accounts payable						20,000
Salaries payable						4,000
Interest payable						1,000
Notes payable (due in two years)						30,000
Common stock						200,000
Retained earnings						50,000
Dividends		20,000
Service revenue						400,000
Salaries expense		180,000
Advertising expense		70,000
Rent expense		15,000
Depreciation expense		30,000
Interest expense		2,000
Utilities expense		32,000
Totals	$	840,000			$	840,000

Prepare an income statement for China Tea Company for the year ended December 31, 2021:

Prepare a classified balance sheet for China Tea Company as of December 31, 2021.(Amounts to be deducted should be indicated with a minus sign.)

Prepare the closing entries for China Tea Company for the year ended December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

China Tea Company Income Statement For the Year Ended December 31, 2021 Revenue Service Revenue $ 400,000 Expenses : Salaries Expenses $ 180,000 Advertising Expenses 70,000 Rent Expenses $ 15,000 Depreciation Expenses IS 30,000 Interest Expenses $ 2.000 Utilities Expenses $ 32,000 Total expenses $ 329,000 Net Income $ 71,000 China Tea Company Statement of stockholders' equity For the Year Ended December 31, 2021 Retained Common stock Earnings Beginning Balance $ 200,000 S 50,000 Add Net Income - $ 71,000 $ 200,000S 121,000 Less: Dividends - $ 20,000 Ending Balance $ 200,000 $ 101,000 $ $

Assets Current assets : Cash Accounts Receivables Prepaid Rent Supplies Total current assets Property. Plant and Equipment Equipment Less: Accumulated Depreciation - Equipe Total Property, plant and Equipment S 11,000 $ 150,000 $ 5,000 $ 25,000 China Tea Company Balance Sheet As of December 31,2021 Liabilities & Stockholders' Equity Current Liabilities Accounts Payable $ 20,000 Salaries Payable $ 4,000 Interest Payable $ 1,000 Total current Liabilities $ 25,000 $191,000 Long Term Borrowings Notes Payable $ 30,000 Total liabilities Stockholders' equity $ 165,000 Common stock $200,000 Retained Earnings $101.000 Total stockholdes' equity $350,000 | Total Liabilities and Stock holders' equity auc 300000 135000 $ 55,000 $301,000 $356,000 Total Assets

Credit Si. No 1 Debit $ 400,000 General journal Serviec revenue Income Summery (Being service revenue account closed recorded) $ 400,000 $ 329,000 Income Summery Salaries Expenses Advertising Expenses Rent Expenses Depreciation Expenses Interest Expenses Utilities Expenses (Being expenses accounhts closed recorded) $ $ $ $ $ $ 180,000 70,000 15,000 30.000 2,000 32,000 $ 71.000 Income Summery Retained Earnings (Being Net Income closed recorded) S 71,000 $ 20,000 Retained Earnings Dividends (Being dividends account closed recorded) $ 20,000