Question

The following are the trial balance and the other information related to Robert Consulting Engineer. ROBERT CONSULTING ENGINEER TRIAL BALANCE DECEMBER 31, 2020 Debit Credit Cash $29,500 Accounts Receivable 55,200 Allowance for Doubtful Accounts $732 Supplies 2,490 Prepaid Insurance 1,740 Equipment 29,700 Accumulated Depreciation-Equipment 6,522 Notes Payable 7,200 Common Stock 10,000 Retained Earnings 22,774 Service Revenue 115,238 Rent Expense 9,516 Salaries and Wages Expense 32,130 Utilities Expenses 1,400 Office Expense 790 $162,466 $162,466 1. Fees received in advance from clients $6,350, which were recorded as revenue. 2. Services performed for clients that were not recorded by December 31, $4,693. 3. Bad debt expense for the year is $1,515. 4. Insurance expired during the year $433. 5. Equipment is being depreciated at 10% per year. 6. Robert gave the bank a 90-day, 10% note for $7,200 on December 1, 2020. 7. Rent of the building is $732 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, $2,739.

Part 1 From the trial balance and other information given, prepare annual adjusting entries as of December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

part 2 Prepare an income statement for 2020. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

part 3 Prepare a retained earnings statement for 2020. Robert paid a $16,350 cash dividend during the year. (recorded in Retained Earnings.) (List items that increase owner's capital first.)

part 4 Prepare a classified balance sheet for 2020. (List current assets in the order of liquidity.)

Answer 1

1) Adjusting journal entries:
Date	Acc Title	Debit $	Credit $
1	Service Rev.	6350
	Unearned Revenue		6350
	(being advance revenue booked to Unearned rev.)
2	Accounts Receivable	4693
	Service Rev.		4693
	(service revenue missed now recorded)
3	Bad Debt	1515
	Allowance for Doubtful Accs		1515
	(bad debt expenses recorded)
4	Insurance exp.	433
	Prepaid Insurance		433
	(insurance exp. recorded)
5	Depreciation exp.	2970
	Acc Dep - equip		2970
	(depreciation recorded on equip. @10% on 29700)
6	Interest exp.	60		(7200*10%*1/12)
	Interest payable		60
	(interest exp. Recorded)
7	Prepaid rent	732
	Rent expense		732
	(being prepaid rent recorded which booked as rent)
8	Salaries & wages exp.	2739
	Salaries & wages payable		2739
	(being salaries & wages made payable)

2)Income statement:
	amount $		calculations
Service revenue	113581		115238-6350+4693
Less:expenses operating:
rent	8784		9516-732
Salary & wages	34869		32130+2739
Utilities	1400		1400
Office exp.	790		790
Bad Debts	1515		1515
Insurance	433		433
Depreciation exp.	2970		2970
Interest	60		60
Total Expenses	50821
Net Income	62760

3) Statement of Retained Earnings:			Calculations
	amount $
Opening Balance	22774
add:Net income	62760
Closing balance	85534
4) Balance Sheet:
Assets:	amount $
Cash	29500		29500
Acc Rec.	59893		55200+4693
Allow for D/A	-2247		-2247
Supplies	2490		2490
Prepaid Insurance	1307		1740-433
Prepaid rent	732		732
Current assets	91675
PPE:
Equipment	29700		29700
Acc Dep.	-9492		-9492
Total Assets	111883
Liabilities & Equity:	amount $
Note payable	7200		7200
Unearned Rev.	6350		6350
Interest payable	60		60
salaries & wages payable	2739		2739
Current liabilities	16349
Equity:
CS	10000		10000
R Earnings	85534
Total Liab. & Equity	111883