Question

5. Prepare an Income Statement and a Balance Sheet from a trial balance.

Using the information from the trial balance of Barger Company, prepare an income statement and balance

sheet. (Hint: Prepare the income statement first, then separately calculate ending retained earnings, and

lastly prepare the balance sheet.)

Debit Credit

Cash 16,000

Accounts Receivable 14,000

Prepaid Rent 10,000

Land 30,000

Unearned Revenue 10,000

Salaries Payable 5,000

Common Stock 15,000

Beginning Retained Earnings 38,000

Service Revenue 12,000

Salaries Expense 5,000

Rent Expense 2,000

Dividends 3,000

80,000 80,000

fees earned

prepaid rent 10,000

Salaries Expense 5,000

Rent Expense 2,000

Total operation expense 17,000

Net Income

2. Other Objective Format

For each event, complete the following horizontal financial statement table. Use + to indicate an increase, - to

indicate a decrease, and "NE" for no effect. If the even has an impact to the Statement of Cash Flows, also

classify the impact as operating activity (OA), investing activity (IA), or financing activity (FA).

EVENT Assets =

Liabilities +

Equity Revenue - Expense = Net Income

Statement of Cash Flows

Classification

Example - Paid utility bill for cash - NE - NE + - - OA

1. Performed services on account.

2. Purchased supplies on account.

3. Purchased land for cash of $100,000.

4. Received cash in advance from a customer for a 12 month subscription to newspaper.

5. Provided six months of newspapers to the customer in #4 above.

6. Accrued salaries and wages payable at month-end.

7. Received cash from issuing common stock.

8. Paid cash dividends to stockholders.

9. Received cash payment for services performed in #1 above.

10. The land purchased in number 3 was appraised at $125,000; a $25,000 gain since purchase.

3. Journal Entries

Record the following transactions and events in the general journal below.

Date Event/Transaction

1-Jan Hermanos Company was started when it issued common stock for $20,000 cash.

1-Feb The company recognized $15,000 of consulting revenue on account.

28-Feb The company collected $12,000 cash from accounts receivable.

31-Mar Hermanos accrued salary expense of $9,000.

15-Apr Paid $7,000 of the accrued salaries.

1-Jun Paid dividends of $1,000 to stockholders.

1-Jul Paid $6,000 cash for an insurance policy with a one year term.

1-Nov Collected $30,000 cash in advance for consulting services to be provided under a one-year contract.

31-Dec Recognized insurance expense (policy from July 1) for expired insurance.

31-Dec Recognized income earned this period from the one-year consulting contract collected in advance Nov 1.

Date Account Title Debit Credit.   

4. Adjustments

Using the information below, prepare the journal entries required at December 31, year 2, to correctly adjust

the accounts of Saul Goodman, attorney-at-law, to reflect revenues earned and expenses incurred in the

current year, year 2. Assume any initial cash transactions have been correctly recorded.

- On October 1, Year 2, the company paid $7,200 to lease office space for one year beginning

immediately.

- On January 1, Year 2, the Supplies account had a balance of $1,200. During the year, the company

purchased $3,400 of supplies for cash. On December 31, Year 2, Saul determined that there were

$1,400 of supplies on hand.

- On December 31, Year 2, Saul owed $4,500 in salaries to employees who had worked during December

but will not be paid until January, Year 3.

- On September 1, Year 2, Saul collected $9,000 in revenue in advance from a client for advisory services

for a one-year period beginning on that date.

Date Account Title. Debit Credit.   

Answer 1

5.

Barger Company
Income Statement
Fees earned		12000
Salaries expense	5000
Rent expense	2000
Total operation expense		7000
Net income		5000

Ending Retained earnings = Beginning retained earnings + Net income - Dividends = $38000 + $5000 - $3000 = $40000

Barger Company
Balance Sheet
Assets
Cash	16000
Accounts receivable	14000
Prepaid rent	10000
Land	30000
Total assets	70000
Liabilities and Equity
Unearned revenue	10000
Salaries payable	5000
Total liabilities	15000
Common stock	15000
Retained earnings	40000
Total stockholders' equity	55000
Total liabilities and stockholders' equity	70000

Per HOMEWORKLIB RULES the first question has been answered. Please post each of the remaining questions separately. Thank you.