Question

PS-7A The un d Rends postati trial balance of Mesa Inc., at the ty's year andere pre MESA INC. Trial Balance December 31, 2018 trial S7800 (LOU Accounts receivable Inventory Supplies Prepaid insurance 2.000 30,000 150,000 $ 34.000 45.000 Buildings Accumulated depreciation buildings Equipment Acumulated depreci q uipment Accounts payable Uncadre Bank los payable Common shares Retained ning Dividends doeld TRO 32.735 4000 147.100 13.000 31.435 Sales 265.770 Sales and allowances Sale di Cost of goods old Salaries expose Unisex Interest pense Income tax expense 5537030 5517010 Additional format and adjustment dat 1. The 12-onth insurance policy was purchased and was elective February 1, 2018 2. There was $750 of supplies on hand on December 31. 3. Depentinexpense for the years 56,000 for the buildings and 54,500 for the 4. Salaries of $750 are cruel and paidat December 31. 5. Accred interest expenses December 31 5735 6. Umeme revenue of 1975 December 31. Os the sales reventh T. Of the bank loan payable, 59,00 is payable next yeat. & Iconset od 500 is due and paid 9. A physical containery indicates $21.00 hund December 31 10. Common shares of $1.000 wereld during the year. earned the cost of goods sold was $2,000 (-) Record the required adjusting entries, suming the company w it s y (b) Setup Taccounts, enter the balances from the adjusted trial balance, and post the adjusting entries prepared in part (c) Prepare adjusted trial balance at December 31 (d) Prepare multiple income taiement, statement of changes in equity, and statement of financial position for the year

Answer 1

MESA Inc. Adjusting Enteries Date Particulars 31.12.2018 Insurance Expense a/c Dr. To Prepaid Insurance (Insurance expensed) 3000 x 11/12 Debit in $ Credit in $ 2750 2750 2190 31.12.2018 Supplies Expense a/c Dr. To Supplies (Supplies expensed) 2940 - 750 2190 Dr. 6000 31.12.2018 Depreciation Expense a/c To Accum. Depre - Build (To record depreciation) 6000 Dr. 4500 Depreciation Expense a/c To Accum. Depre - Equip. (To record depreciation) 4500 Dr. 750 31.12.2018 Salary expense a/c To Salary Payable (Salary accrued) 750 Dr. 735 31.12.2018 Interest Expense a/c To Interest Payable (Interest accrued) 735 Dr. 3025 31.12.2018 Unearned Revenue a/c To Sales (Sales earned) 4000 - 975 3025 Dr. 2000 Cost of goods sold a/c To Inventory (To record cost of goods sold) 2000 31.12.2018 No Journal entry Dr. 500 31.12.2018 Income Tax Expense a/c To Income tax Payable (Income Tax accrued) 500 31.12.2018 Cost of goods sold a/c Dr. To Inventory (Loss of Inventory) 28750 - 23800 4950

Statement of Income For the period ending 31.12.2018 Sales Sales Returns and Allowances Sales Discounts Net Sales Cost of goods sold Gross Profit Salaries Expense Utilities Expense Supplies Expense Depreciation Expense Insurance Expense 268795 -2500 -3275 263020 -178175 84845 31700 5100 2190 10500 2750 52240 32605 Non Operating Items: Interest Expense Adjusted Trial Balance For the period ending 31.12.2018 Particulars Cash Accounts Receivable Inventory Supplies Prepaid Insurance Land Building Accum. Depre - Build Equipment Accum. Depre - Equip. Accounts Payable Unearned Revenue Salary Payable Interest Payable Income tax Payable Bank Loan Payable Common Shares Retained Earnings Dividends declared Sales Sales Returns and Allowances Sales Discounts Cost of goods sold Salaries Expense Utilities Expense Supplies Expense Depreciation Expense Insurance Expense Interest Expense Income Tax Expense Totals Debit in $ Credit in $ 17000 31700 21800 750 250 30000 150000 30000 45000 22500 33735 975 750 735 500 147100 13000 31425 2000 268795 2500 3275 178175 31700 5100 2190 10500 2750 8825 6000 549515 549515 -8825 23780 -6000 17780 Income Tax Expense Net Income Statement of Changes in Stockholders Equity For the period ending 31.12.2018 Common Retained Stock Earnings Beginning Balance 10000 31425 Add:Additions 3000 Net Income 17780 Less:Dividends -2000 13000 47205 Total 41425 3000 17780 -2000 60205

Balance sheet As at 31.12.2018 Assets Amounts in $ Amounts in $ Liabilities Amounts in S Amounts in $ Current Assets Current Liabilities Cash 17000 Accounts Payable 33735 Accounts Receivable 31700 Unearned Revenue 975 Inventory 21800 Salary Payable 750 Supplies 750 Interest Payable 735 Prepaid Insurance 250 71500 Income tax Payable 500 Bank Loan Payable 9800 46495 Non Current Assets Land 30000 Non Current Liabilities Building 150000 Bank Loan Payable 137300 Accum. Depre - Build -30000 120000 Equipment 45000 Shareholders Equity Accum. Depre - Equip -22500 22500 Common Shares 13000 Retained Earnings 47205 60205 Total Assets 244000 Total Liabilities & Equity 244000