Question

ACC 255 Comprehensive Problem 1 Part B

SECTION SCORE ACC 255 SPRING 2020 COVER SHEET FOR PART B COMPREHENSIVE PROBLEM 1 (CHAPTERS 1, 3, 4) INSTRUCTIONS: Complete all requirements for the compreher Si complete all requirements for the comprehensive problem and turn in the original your problem (stapled) by the due date & time specified by you tapled by the due date & time specified by your professor. No late problems will b For any reason! You should take pictures of your solution to check your answers with the solutions which will be provided on BbLearn. REQUIREMENTS Part B: (3) PREPARE FINANCIAL STATEMENTS: INCOME STATEMENT STATEMENT OF RETAINED EARNINGS BALANCE SHEET (4) PREPARE CLOSING ENTRIES POST CLOSING ENTRIES TO INCOME SUMMARY & RETAINED EARNINGS

Answer 1

Sparkle pool and spa service
Income statement
For the period September 30, 2020 (amount in $)
Service revenue	218000
Total revenue		218000
Expenses:
Salaries & wages expense	140000
Rent expens	15300
Advertising expenses	4700
Insurance expense	900
Legal expense	850
Utilities expense	4500
Supplies expense	10000
Depreciation	7860
Less:Total operating expense		184110
Operating income		33890
less:interest expense		1680
Earnings before tax		32210
less:income tax expense		8800
Net income		23410

Sparkle pool and spa service
Satement of retained earnings
For the period Septem 30, 2020 (amount in $)
retained earnings at the beginning		0
add:net income		23410
less:dividend		-12000
retained earnings at the end		11410

Sparkle pool and spa service
Balance Sheet
As of September 30, 2020 (amount in $)
Assets
current assets
cash	43000
accounts receivable	11800
supplies	2870
prepaid insurance	900
Total current assets		58570
long-term assets
computers	3780
accumulated dep.	-1260	2520
truck	33000
accumulated dep.	-6600	26400
Total assets		87490
Liabilities
current liabilities
accounts payable	5600
salaries and wages payable	3500
interest payable	1680
unearned service revenue	1300
Total current liabilities		12080
long-term liabilities
notes payable		24000
Total liabilities		36080
stockholders equity
common stock	40000
retained earnings	11410	51410
Total liabilities and stockholders equity		87490

	Closing journal entries
Date	Account	Dr.($)	Cr.($)
Sep-30	Service revenue	218000
	To Income summary		218000
Sep-30	Income summary	194590
	To Salaries & wages expense		140000
	To Rent expens		15300
	To Supplies expense		10000
	To Income tax expense		8800
	To Depreciation		7860
	To Advertising expenses		4700
	To Utilities expense		4500
	To Interest expense		1680
	To Insurance expense		900
	To Legal expense		850
Sep-30	Income summary	23410
	To Retained earnings		23410
Sep-30	Retained earnings	12000
	To Dividend		12000

Income summary
salaries & wages expense	140000	service revenue	218000
rent expens	15300
supplies expense	10000
income tax expense	8800
depreciation	7860
advertising expenses	4700
utilities expense	4500
interest expense	1680
insurance expense	900
legal expense	850
retained earnings (balance)	23410
Total	218000	Total	218000

Retained earnings
dividend	12000	income summary	23410
ending balance (balance)	11410
Total	23410	Total	23410