Question

•1. Set up the balance column, accounts for rainmaker's environmental consultant and enter the balances listed in the unadjusted trial balance

•2. Post the adjustment entries prepared in problem 3-9A to the accounts.

• 3. Prepared an adjustment balance. 4. Use the adjusted trail balance to prepare an income statement, a statement of changes in equity and a balance sheet. Assume that the owner, Jeff Moore, made no owner investments during the year.

•Analysis Component : Assumes that total revenue and expenses reported for the year ended October 31,2019, were $189,000 and $157,600,respectively. compare the business's financial performance for the years ended October 31, 2019 and 2020.

•Note

• For part 1, your instructor may ask you to set up T-accounts instead of balance column accounts. The solution is available in both formats.

CHAPTER 3 Adjusting Accounts for Financial Statements It was determined that $12,000 of the unearned consulting revenue had not yet been earned. It was discovered that $14,000 of the balance in the Consulting Revenue account was for services to be performed in November. c. The balance in the Prepaid Rent account represents three months of rent beginning September 1, 2020. d. Accrued wages at October 31 totalled $6,800. The office furniture was purchased on March 1, 2019, and has an estimated useful life of two years. After two years of use, it is expected that the furniture will be worthless. f. Accrued consulting revenue at year-end totalled $4,200. g. Interest of $85 had accrued on the note receivable for the month of October. h. The balance in the Prepaid Insurance account represents the remaining balance of a two-year policy purchased on April 1, 2019. i A count of the supplies on October 31 revealed a balance remaining of $620. 162 Rainmaker Environmental Consultants Unadjusted Trial Balance October 31, 2020 Acct. No. Account Debit Credit 101 Cash... $ 26,000 106 Accounts receivable.... 61,000 109 Interest receivable........... -O- 111 Notes receivable............. 50,000 126 Supplies 5,300 128 Prepaid insurance........... 3,400 131 Prepaid rent... 27,000 161 Office furniture ............. 84,000 Accumulated depreciation, office furniture...... $ 28,000 201 Accounts payable... 18,000 210 Wages payable....... Unearned consulting revenue. 26,000 301 Jeff Moore, capital............ 223,000 Jeff Moore, withdrawals........... 28,000 Consulting revenue................ 232,020 409 Interest income 480 Depreciation expense, office furniture. 622 Wages expense...... 192,000 637 Insurance expense............ 640 Rent expense...................... 44,000 650 Supplies expense. 6,800 Totals... $527,500 $527,500 -0- 233 302 401 601 -0- Required Prepare the annual adjusting journal entries for October 31, 2020, based on the above. Assume Rainmaker Environmental uses the straight-line method to depreciate its assets. Froblem 3-10A Posting, adjusted trial balance, and preparing financial statements L06,7 UN FIGURES:3. Adjusted trial balance, debits = $580,585; 4. LOSS = $79,895 Required Using the information in Problem 3-9A, complete the following: 1. Set up balance column accounts for Rainmaker Environmental Consultants and enter the balances listed in the unadjusted trial balance. 213

Answer 1

Adjusted Trial Balance

Particulars Dr($) Cr($)

cash 26000

Accounts Receivable 61000

interest Receivable 85

notes Receivable 50000

supplies 620

prepaid insurance 400

prepaid rent 9000

office furniture 84000

depreciation accumulated 70000

account payable 18000

wages payable 6800

unearned consultancy revenue 42200

capital 223000

withdrawl 28000

consultancy revenue 220020

interest income 565

depreciation 42000

wages 192000

insurance expenses 0

rent expenses 62000

supplies expenses 11480

advance consultancy revenue 14000

total 580585 580585