Question

The trial balances before and after adjustment for Sunland Company at October 31, 2021, which is the end of its fiscal year, are as follows: Before Adjustment After Adjustment Debit Credit Debit Credit Cash $9.190 $9,190 Accounts Receivable 8,865 9,405 Supplies 2.510 610 Prepaid Insurance 3,830 2.550 Equipment 34,205 34,205 Accumulated Depreciation-Equipment $3,300 Accounts Payable Notes Payable 38,275 Salaries Payable Interest Payable 0 440 Unearned Revenue 1.485 295 E. Sunland, Capital 5. 630 5 ,630 E. Sunland, Drawings 10.370 10.370 Service Revenue 47.760 Depreciation Expense 2230 Insurance Expense 1280 Interest Expense 1.760 1320 14545 Rent Expense 14 545 Salaries Expense 17 345 18.465 Supplies Expense

Answer 1

Adjusting Entries:

Date	Account title and Explanation	Debit	Credit
Dec.31	Accounts receivable [9,405-8,865]	$540
	Service revenue		$540
	[To accrue revenue for services performed but not billed or collected]
Dec.31	Supplies expense	$1,900
	Supplies		$1,900
	[To record supplies used]
Dec.31	Insurance Expense	$1,280
	Prepaid insurance		$1,280
	[To record insurance expired]
Dec.31	Depreciation Expense	$2,230
	Accumulated depreciation-Equipment		$2,230
	[To record depreciation expense]
Dec.31	Salaries expense [18465-17345]	$1,120
	Salaries payable		$1,120
	[To record accrued salaries]
Dec.31	Interest expense [1760-1320]	$440
	Interest payable		$440
	[To record interest expense]
Dec.31	Unearned revenue [1,485-825]	$660
	Service revenue		$660
	[To record revenue from unearned]

Income Statement:

SUNLAND COMPANY
Income Statement
For the year ended October 31,2021
Revenues:
Service revenue		$48,960
Expenses:
Depreciation Expense	$2,230
Insurance Expense	$1,280
Interest expense	$1,760
Rent expense	$14,545
Salaries expense	$18,465
Supplies expense	$1,900
Total expenses		$40,180
Net income		$8,780

Statement of Owner's equity:

SUNLAND COMPANY
Statement of Owner's Equity
For the year ended October 31,2021
E. Sunland Capital, Beginning	$5,630
Add: Net income	$8,780
	$14,410
E. Sunland, Drawings	($10,370)
E. Sunland Capital, Ending	$4,040

Balance Sheet:

SUNLAND COMPANY
Balance Sheet
October 31,2021
Assets
Cash		$9,190
Accounts Receivable		$9,405
Supplies		$610
Prepaid insurance		$2,550
Equipment	$34,205
Accumulated depreciation-Equipment	($5,530)	$28,675
Total Assets		$50,430
Liabilities and Owner's Equity
Accounts payable		$5,730
Notes payable		$38,275
Salaries payable		$1,120
Interest payable		$440
Total liabilities		$45,565
Owner's equity:
Unearned revenue	$825
E. Sunland, Capital	$4,040
Total owner's equity		$4,865
Total liabilities and Owner's equity		$50,430