Question

Problem 3-06 The following are the trial balance and the other information related to Kenneth Consulting Engineer. Credit $817 KENNETH CONSULTING ENGINEER TRIAL BALANCE DECEMBER 31, 2020 Debit Cash $29,500 Accounts Receivable 57,200 Allowance for Doubtful Accounts Supplies 1,500 Prepaid Insurance 1,270 Equipment 29,700 Accumulated Depreciation Equipment Notes Payable Common Stock Retained Earnings Service Revenue Rent Expense 10,621 Salaries and Wages Expense 34,650 Utilities Expenses 1,680 Office Expense 680 $166,801 5,759 7,200 10,000 22,092 120,933 $166,801 1. Fees received in advance from clients $5,580, which were recorded as revenue. 2. Services performed for clients that were not recorded by December 31, $5,193. 3. Bad debt expense for the year is $1,325. 4. Insurance expired during the year $515. 5. Equipment is being depreciated at 10% per year. 6. Kenneth gave the bank a 90-day, 10% note for $7,200 on December 1, 2020. 7. Rent of the building is $817 per month. The rent for 2020 has been paid, as has that for January 2021, and recorded as Rent Expense. 8. Office salaries and wages earned but unpaid December 31, 2020, $2,260.

Answer 1

Credit Debit $5,580 $5,580 $ 1,20,546 $5,193 $5,193 $1,325 $1,325 No Account Titles 1. Service Revenue Unearned Revenue Accounts Receivable Service Revenue 3. Bad Debt Expenses Allowances for doubtful debts Insurance Expenses Prepaid Insurance Depreciation Expenses Accumulated Depreciation 6. Interest Expenses Interest Payable Prepaid Rent Rent Expenses Salaries & wages Expenses Salaries & wages payable Income Statement Revenue: Service Revenue Expenses: Rent Expenses Salaries & Wages Expenses $ Utilities Expenses Office Expenses Insurance Expenses Interest Expenses Bad Debt Expenses Depreciation Expenses $ Net Income $ 515 $ 515 9.804 36,910 1,680 680 515 60 1,325 2,970 $ $ $2.970 29700*10% $2,970 $ 60 7200*10%/12 53,944 66,602 $ 60 $ 817 $ 817 8 Salal $2,260 Statement of Retained Earnings Opening Retained Earnings $ Add: Net Income Less: Dividend $ Closing Owner's Capital $ 22,092 66,602 $2,260 $ 88,694

29,500 60,251 1,500 755 817 $ 92,823 Balance Sheet Assets Current Assets Cash $ Accounts Receivable $62,393 Less: Allowance for Doubtful Accounts $ -2,142 $ Supplies $ Prepaid Insurance $ Prepaid Rent $ Total Current Assets Property Plant & Equipment Equipment $ Less: Accumulated Depreciation $ Total Assets Liabilities & Stockholder's Equity Current Liabilities Notes Payable Interest payable $ Salaries & wages payable $ Unearned Service Revenue Total Current Liabilities Stockholder's Equity $ Retained Earnings $ Total Stockholder's Equity Total Liabilities & Stockholder's Equity 29,700 -8,729 $ 20,971 $ 1,13,794 7,200 60 2,260 5,580 S 15,100 10,000 88,694 $ 98,694 $1,13,794