Question

You have been given the unadjusted trial balance for your company as of 12/31/19. Each company prepares financial statements annually. Required Tasks: 1. Using the information in the Worksheet (1) tab, Aging Analysis (2) tab, and Adjustments (3) tab, prepare the adjusting journal entries for the period. Record the entries in the Adjusting Journal Entries (4) tab. (Round all numbers to the nearest dollar.) SHOW YOUR WORK FOR THE ADJUSTMENT IN THE CELL OR YOU WILL NOT RECEIVE CREDIT FOR THE ENTRY. Use formulas and link the values to the adjustment 2. After the above adjusting entries are entered on the Adjusting Journal Entries (4) tab, the amounts should be linked to the Adjustments column of the Worksheet (1). Your adjustment amounts should be a formula so if you change the debit/credit amount on the Adjusting Journal Entries (4), the column amount will automatically change. 3. Complete the Adjusting Trial Balance columns of the by the Worksheet (1) using formulas. Think about the best way to do this. Your last three sets of columns should never contain constant numbers but will include formulas only. 4. Prepare a multiple-step income statement on the Income Statement (5) tab. Your Income Statement should be in good form (proper titles, etc., see text page 230) and well formatted. The accounts of the financial statements should follow the order of accounts on the trial balance. You should use formulas in all cells, not constant numbers. (That means, your income statement should be linked to the adjusted numbers on your worksheet.) 5. Prepare a Statement of Retained Earnings (6) on the proper worksheet. Your Statement should be formatted. You should use formulas in all cells, not constant numbers. 6. On the designated worksheet tab, prepare in journal entry form the Closing Entries (7) at the end of 12/31/19. Link entries to the Worksheet (1) and/or financial statement tabs.

Answer 1

Rochester Enterprises Adjusting Enteries Date Particulars 31.12.2019 Interest Expense a/c Dr. To Interest Payable (Interest accrued) 350550 x 5% x 11/12 Debit in $ Credit in $ 16067 16067 Age of Accounts as at 31.12.2019 % collectible Uncollectible Current 296971 2% 5939 1 - 30 Days 123738 4% 4950 31 - 90 Days 59394 15% 8909 Over 90 Days 14849 35% 5197 Total Accounts Receivable 494952 24995 Less:Allowance fro Doubtful accounts -20861 4428 4124 4428 31.12.2019 Insurance Expense a/c Dr. To Prepaid Insurance (Insurance expensed) 13284 x 2/6 13284 31.12.2019 Rent Expense a/c Dr. To Prepaid Rent (Rent expensed) 22140 x 3/5 13284 10667 31.12.2019 Unearned Revenue a/c Dr. To Consulting Revenue (Revenue earned) 32000 x 4/12 10667 41858 31.12.2019 Supplies Expense a/c Dr. To Supplies (Supplies expensed) 56088 - 14230 41858 41008 31.12.2019 Depreciation Expense a/c Dr. To Accum. Depre - Equip. (To record depreciation) (517092 - 25000 )/12 41008 993 31.12.2019 Interest Receivable a/c Dr. To Interest Revenue (Interest earned) 183290 x 6.5% x 1/12 993 Dr. 4134 31.12.2019 Bad debts a/c To Allowance for Doubtful accounts (To estmate bad debts) 4134 66789 31.12.2019 Salaries and Wages Expense a/c Dr. To Salaries and Wages Payable (Wages accrued) 66789 Dr. 4941 31.12.2019 Utility Expense a/c To Utilities Payable (Expense accrued) 4941

Worksheet For the period ending 31.12.2019 Particulars Cash Accounts Receivable Allowance for Doubtful accounts Interest Receivable Note Receivable Merchandise Inventory Prepaid Insurance Prepaid Rent Supplies Equipment Accum. Depre - Equipment Accounts Payable Salaries and Wages Payable Unearned Revenue Interest Payable Utilities Payable Note Payable (due 2023) Common Stock Retained Earnings Dividends Sales Revenue Consulting Revenue Sales Returns and Allowances Sales Discounts Cost of goods sold Salaries and Wages Expense Depreciation Expense - Equip. Bad debts Expense Insurance Expense Rent Expense Supplies Expense Utility Expense Interest Revenue Interest Expense Totals Unadjusted Adjustments Adjusted Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 125214 125214 494952 494952 20861 4134 24995 993 993 183290 183290 361866 361866 13284 4428 8856 22140 13284 8856 56088 41858 14230 517092 517092 54612 41008 95620 51709 51709 66789 66789 32000 10667 21333 16067 16067 4941 4941 350550 350550 270600 270600 418200 418200 120540 120540 5169690 5169690 10667 10667 29520 29520 63468 63468 3520014 3520014 801468 66789 868257 41008 41008 4134 4134 4428 4428 13284 13284 41858 41858 59286 4941 64227 993 993 16067 16067 6368222 6368222 204168 204168 6502153 6502153

5169690 -29520 -63468 5076702 -3520014 1556688 Statement of Income For the period ending 31.12.2019 Sales Revenue Sales Returns and Allowances Sales Discounts Net Sales Cost of goods sold Gross Profit Salaries and Wages Expense Depreciation Expense - Equip. Bad debts Expense Insurance Expense Rent Expense Supplies Expense Utility Expense Operating Income Non Operating Items: Consulting Revenue Interest Revenue Interest Expense Net Income 868257 41008 4134 4428 13284 41858 64227 1037196 519492 10667 993 -16067 -4407 515085 Statement of Retained Earnings For the period ending 31.12.2019 Beginning Balance Net Income 418200 515085 933285 -120540 812745 Dividends

Amounts in $ Amounts in $ Balance sheet As at 31.12.2019 Assets Current Assets Cash Accounts Receivable Allowance for Doubtful accounts Interest Receivable Note Receivable Merchandise Inventory Prepaid Insurance Prepaid Rent Supplies Amounts in $ Amounts in $ Liabilities Current Liabilities 125214 Accounts Payable 494952 Salaries and Wages Payable -24995 Unearned Revenue 993 Interest Payable 183290 Utilities Payable 361866 8856 Non Current Liabilities 8856 Note Payable 14230 1173262 51709 66789 21333 16067 4941 160839 350550 Non Current Assets Equipment Accum. Depre - Equipment 517092 -95620 Shareholders Equity Common Stock 421472 Retained Earnings 1594734 270600 812745 1083345 1594734