Question

All Seasons Service 1 2 Trial Balance December 31, 2018 3 5 DR CR 6 Cash 126 7 Accounts Receivable 1,708 8 Office Supplies 9 Equipment 10 Accumulated Depreciation-Equipment 11 Accounts Payable 12 Credit Cards Payable 13 Short Term Notes Payable 14 Owner's Equity 15 Service Revenue 16 Advertising 17 Bank Service Charge 18 Client Expenses 19 Refreshments 20 Commissions Paid to Independent Contractors 21 Tax Expense 22 Dues and Subscriptions 23 Filing Fees 213 23,190 2,709 849 3,454 5,250 500 39,373 22 282 598 24 18,583 500 1,447 420 24 Gifts 25 25 Insurance 26 Interest Expense 852 982 27 Meals and Entertainment 286 28 Miscellaneous Expense 29 Listing Fees 30 Shipping 31 Supplies Expense 32 Office Supplies Expense 189 168 40 67 164 33 Electronic Lock Subscription 206 34 Telephone Expense 35 Website Expense 1,893 150 36 37 TOTALS 52,135 $ 52,135 38

Answer 1

ANSWER

As per the given question,

I Adjustment Entries:

1. Insurance: No entry required as the same has already been charged off fully and there is nothing in prepaid insurance a/c in Trial Balance

2. Provision for Doubtful Debs:

    Allowance for Doubtful Debts (P&L a/c)     Dr.   $350

    Allowance for Doubtful Debts Liability a/c   Cr.   $350

3.Depreciation

    Depreciation expenses                              Dr. $474

     Accumulated Depreciation                        Cr. $474

4. Commission: No entry required. However, it is to be noted that the same should not be grouped under Employee expenses

5. Owners Equity: No entry required

6. Supplies: No entry required

7. Office supplies:

   Office supplies expenses         Dr. $110

   Office supplies                        Cr. $110

8. Client expenses: No entry required

9. No entry. Just info

II B/s, Income Statement and Owners Equity A/C

		……..Company
		Balance Sheet
		31-Dec-15
Cash		126.00	-
Accounts Receivable		1,708.00
Allowance doubtful Debt			(350.00)
Office Supplies		213.00	(110.00)
Equipment		23,190.00
Accumulated depreciation		(2,709.00)	(475.00)
Total Assets		22,528.00	(935.00)
Accounts Payable		849.00
Credits Card Payable		3,454.00
Short Term Notes Payable		5,250.00
Total Liabilities		9,553.00	-
Owners Equity		500.00
Income for the year		12,475.00	(935.00)
Total Owners Equity		12,975.00	(935.00)
Total Liabilities & Equity		22,528.00	(935.00)
		-	-
		……..Company
Statement of Comprehensive Income for the year ending 31-Dec-15
Service Revenue		39,373.00
Less: Cost of Goods Sold (COGS)
Client expenses		598.00
Commission paid to contractors		18,583.00
Supplies expenses		67.00
Depreciation			475.00
Total COGS		19,248.00	475.00
Gross Margin		20,125.00	(475.00)
Less: Operating Expenses
Selling expenses
Advertising		22.00
Shipping		40.00
Allowance for Doubtful debt			350.00
General & Administration expenses
Bank Service charge		282.00
Refreshments		24.00
Dues & Subscriptions		1,447.00
Filing Fee		420.00
Gifts		25.00
Insurance		852.00
Meals & Entertainment		286.00
Miscellaneous Expenses		189.00
Listing Fee		168.00
Office Supplies expenses		164.00	110.00
Electronic lock subscription		206.00
Telephone expenses		1,893.00
Website expenses		150.00
Total Operating expenses		6,168.00	460.00
Operating Income		13,957.00	(935.00)
Less: Other exp & Losses
Interest expenses		982.00
Income before tax		12,975.00	(935.00)
Less: Provision or income tax		500.00
Net Income		12,475.00	(935.00)
		……..Company
Statement of changes in Owners Equity for the year ended 31-Dec-15
Opening Balance		500.00
Add: Net Income for the year		12,475.00	(935.00)
Closing Balance		12,975.00	(935.00)

III Cover Note:

                                  Accountant's Compilation Report

I (we) have compiled the attached Balance Sheet as on 31-Dec 15 and Income Statement & the Statement of Owners equity for the year 31st Dec of All Seasons Services] included in the accompanying prescribed

form.

I (we) have not audited or reviewed the financial statements included in the accompanying prescribed form and, accordingly, do not express an opinion or provide any assurance about whether the financial statements are in

accordance with the basis of accounting prescribed by AICPA's SSARS].

Management (owners) is (are) responsible for the preparation and fair presentation of the financial statements included in the form in accordance with the basis of AICPA prescribed form

My (our) responsibility is to conduct the compilation in accordance with State-ments on Standards for Accounting and Review Services issued by the AICPA. The objective of a compilation is toassist management in presenting financial information in the form of financial statements without undertaking to obtain or provide any assurance that there are no material modifications that should be made to the financial statements.

The financial statements included in the accompanying prescribed form are presented in accordance with the requirements of AICPA and are not intended to be a complete presentation of entity's assets and liabilities.

This report is intended solely for the information and use of the specified xxx of engagement letter dated xxxx] and is not intended to be and should not be used by anyone other than these specified parties.

We draw the attention to the adjustment entries which were not passed by management.

We also, draw the attention that the company has chosen not present the notes and disclosures to financials statements which are essentially required. In the absence of such an information, the financial statements may not provide the complete picture and are not in agreement with the AICPA requirements

Signature of accounting firm or accountant

ALL THE BEST ......

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