Question

Mackenzie Inc. uses a perpetual inventory system and has prepared the following adjusted trial balance on December 31, 2019:

11 Unearned Rent 360.00 12 Income Taxes Payable 2,525.00 13 Note Payable 5,000.00 14 Interest Payable 800.00 15 Common Stock

For classification purposes: Note payable is due July 1, 2023 Interest payable is due July 1, 2023 Common Stock (1,500 shares

CHART OF ACCOUNTS Mackenzie Inc. General Ledger ASSETS REVENUE 111 Cash 121 Accounts Receivable 122 Allowance for Doubtful Ac

LIABILITIES 211 Accounts Payable 230 Salaries Payable 232 Unearned Rent 270 Income Taxes Payable 271 Note Payable 272 Interes

Labels Contributed Capital Current Assets Current Liabilities Long-term Liabilities Operating expenses Other items Property,

Amount Descriptions Dividends for 2019 Gross profit Income before income taxes Income from operations Net income Net income f

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Answer #1

1.   Mackenzie Inc.

Income Statement

Sales Revenue 35,490

Cost of Goods sold 15,380   

Gross Profit 20,110

Other Operating Revenue

Rent Revenue 1,320

Total Revenue 21,430   

Operating Expenses:

Selling Expense 4,900

Administrative Expense 2,800

Interest Expense 800

Total Expense 8,500

Net Profit(EBIT) 12,930

Income Tax Expense. 2,525

Net Income(EAT) 10,405

2.   Mackenzie Inc.

Statement of Retained earnings

Beginning Balance 7,540

Add:Net income 10,405

Less: Dividends 1,200

Ending balance 16,745

3. Mackenzie Inc.

Balance Sheet

Assets. Liabilities

CurrentAssets Current Liabilities

Cash 2,800 Accounts Payable 3,100

Accounts Receiveble (Net) 3,050 Unearned Rent 360

Inventory 6,500 Salaries payable 420

Prepaid Insurance 800 Income tax payable 2,525

Fixed Assets Interest payable 800

Land 6,000 Long term liabilities

Building and equipment 32,700 Notes payable 5,000

Less: Accumulated Stock Holders Equity

depreciation -15,100 Common Stock 7,800

Retained earnings 16,745

Total Assets 36,750 Total Liabilities and 36,750 stockholders equity

4.Adjusting Entry

Sales revenue Dr. 35,490

Rent revenue Dr. 1,320

To Income Statement 36,810

Income Statement Dr. 26,405

To Cost of goods sold 15,380

ToSelling expenses 4,900

To Administrative expenses 2,800

To Interest expenses 800

To Income tax expenses 2,525

Income Statement Dr. 10,405

To Retained Earnings 10,405

Retained earnings Dr. 1,200

To Dividends declared 1,200

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