Question

The following are the trial balance and the other information related to Charles Consulting Engineer. CHARLES CONSULTING ENGINEER TRIAL BALANCE DECEMBER 31, 2020 Debit Credit Cash $29,500 Accounts Receivable 52,700 Allowance for Doubtful Accounts $701 Supplies 2,000 Prepaid Insurance 1,680 Equipment 26,300 Accumulated Depreciation-Equipment 6,310 Notes Payable 7,200 Common Stock 10,000 Retained Earnings 24,581 Service Revenue 107,741 Rent Expense 9,113 Salaries and Wages Expense 32,990 Utilities Expenses 1,640 Office Expense 610 $156,533 $156,533 1. Fees received in advance from clients $6,340, which were recorded as revenue. 2. Services performed for clients that were not recorded by December 31, $4,790. 3. Bad debt expense for the year is $1,371. 4. Insurance expired during the year $461. 5. Equipment is being depreciated at 10% per year. 6. Charles gave the bank a 90-day, 10% note for $7,200 on December 1, 2020. 7. Rent of the building is $701 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, $2,428. Need income statement, statement of retained earnings, balance sheet.

Answer 1

Charles Consulting Journal entries Date Account 1 Service Revenue Unearned Service Revenue Credit Calculation Debit $ 6,340 $ 6,340 $ 4,790 Accounts Receivable Service Revenue $ 4,790 3 $ 1,371 Bad debt expense Allowance for Doubtful Accounts $ 1,371 4 $ 461 Insurance expense Prepaid Insurance $ 461 5 $ 2,630 =26,300*10% Depreciation expense Accumulated Depreciation-Equipment $ 2,630 $ 60 =7,200*10%*1/12 Interest expense Interest Payable $ 60 7 $ 701 Prepaid Rent Rent expense $ 701 8 $ 2,428 Salaries and Wages expense Salaries and Wages Payable $ 2,428

Charles Consulting T Accounts Date Debit Date Cash Unadj Bal $ 29,500 Credit Credit Date Debit Date Credit Accounts Receivable Unadj Bal $ 52,700 2 $ 4,790 Date Debit Date Credit Date Debit Date Allowance for Doubtful Accounts Supplies Unadj Bal $ 701 Unadj Bal $ 2,000 3 $ 1,371 $ 2,072 Bal. $ 29,500 Prepaid Insurance Unadj Bal $ 1,680 4 Bal. $ 57,490 Prepaid Rent Unadj Bal $- $ 4617 $ 701 Equipment Unadj Bal $ 26,300 Bal. $ 2,000 Accumulated Depreciation Equipment Unadj Bal $ 6,310 5 $ 2,630 Bal. Bal. Bal. $ 1,219 Notes Payable Unadj Bal $ 7,200 3 $ 1,371 $ 701 Unearned Service Revenue Unadj Bal $ - 1 $ 6,340 $ 26,300 Interest Payable Unadj Bal $ 6 $ Bal. $ 8,940 Salaries and Wages Payable Unadj Bal $ 8 $ 2,428 60 $ 8,571 Bal. $ 2,428 Bal. Common Stock Unadj Bal $10,000 Bal. $ 6,340 Retained Earnings Unadj Bal $ 24,581 Bal. $ 60 Service Revenue Unadj Bal $107,741 $ 6,340 2 $ 4,790 1 $ 10,000 Bal. $ 106,191 Bal. Rent expense Unadj Bal $ 9,113 7 $ 24,581 Salaries and Wages expense Unadj Bal $32,990 8 $ 2,428 Utilities expense Unadj Bal $ 1,640 3 $ 1,371 Office Expense Unadj Bal $ 610 $ 701 Bal. bal. Bal. $ 8,412 Bad debt expense Unadj Bal $ 3 $ 1,371 $ 35,418 Insurance expense Unadj Bal $ - 4 $ 461 Bal. $ 3,011 Depreciation expense Unadj Bal $ - 5 $ 2,630 Bal. $ 610 Interest expense Unadj Bal $ - 6 $ 60 Bal. $ 1,371 $ 461 Bal. $ 2,630 $ 60

Charles Consulting Account Names Cash Accounts Receivable Allowance for Doubtful Accounts Supplies Prepaid Insurance Prepaid Rent Equipment Accumulated Depreciation Equipment Notes Payable Unearned Service Revenue Interest Payable Salaries and Wages Payable Common Stock Retained Earnings Service Revenue Rent expense Salaries and Wages expense Utilities expense Office Expense Bad debt expense Insurance expense Depreciation expense Interest expense Totals Adjusted TB Debit Credit 29,500 57,490 2,072 2,000 1,219 701 26,300 8,940 8,571 6,340 60 2,428 10,000 24,581 106,191 8,412 35,418 3,011 610 1,371 461 2,630 169,183 169,183

106,191 Charles Consulting Income Statement For the Year Ended December 31, 2020 Revenues Service Revenue Expenses Rent expense Salaries and Wages expense Utilities expense Office Expense Bad debt expense Insurance expense Depreciation expense Total Operating expenses Operating Income Interest expense Net Income 8,412 35,418 3,011 610 1,371 461 2,630 51,913 54,278 60 54,218 Statement of Retained Earnings For the Year Ended December 31, 2020 Retained Earnings, Beginning balance Net Income Retained Earnings, Ending Balance 24,581 54,218 78,799

Charles Consulting Balance Sheet As of December 31, 2020 Assets Current Assets Cash Accounts Receivable Allowance for Doubtful Accounts Supplies Prepaid Insurance Prepaid Rent Total Current Assets 29,500 57,490 (2,072) 55,418 2,000 1,219 701 88,838 Property, Plant & Equipment Equipment Accumulated Depreciation Equipment Total Property, Plant & Equipment Total Assets 26,300 (8,940) 17,360 106,198 Liabilities & Stockholders Equity Current Liabilities Notes Payable Unearned Service Revenue Interest Payable Salaries and Wages Payable Total Liabilties 8,571 6,340 2,428 17,399 Stockholders Equity Common Stock Retained earnings Total Stockholders Equity Total Liabilities & Stockholders Equity 10,000 78,799 88,799 106,198