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Rangoon Corporation | |
First we will make adjustment entries. Then we will prepare adjusted trial balance. Then we will prepare financial statements. | |
Workings for adjustment entries | Amount $ |
Prepaid Rent- Opening | 9,500.00 |
Less: Prepaid Rent- closing | 2,300.00 |
Rent Expense | 7,200.00 |
Office Supplies- Opening | 4,200.00 |
Less: Office Supplies- closing | 650.00 |
Office Supplies Expense | 3,550.00 |
Unearned revenue- Opening | 11,200.00 |
Less: Unearned revenue- closing | 3,120.00 |
Service Revenue earned | 8,080.00 |
Notes payable | 50,000.00 |
Interest rate | 8% |
Annual Interest | 4,000.00 |
Interest payable for 3 months | 1,000.00 |
Adjusting Entries | ||
Account | Debit $ | Debit $ |
Rent Expense | 7,200.00 | |
Prepaid Rent | 7,200.00 | |
Office Supplies Expense | 3,550.00 | |
Office Supplies | 3,550.00 | |
Depreciation Expense- Equipment | 35,250.00 | |
Accumulated Depreciation- Equipment | 35,250.00 | |
Unearned revenue | 8,080.00 | |
Service Revenue | 8,080.00 | |
Wages Expense | 1,450.00 | |
Wages Payable | 1,450.00 | |
Interest Expense | 1,000.00 | |
Interest payable | 1,000.00 | |
Income Tax Expense | 55,539.00 | |
Income Tax payable | 55,539.00 |
Adjusted Trial Balance | ||||||
Unadjusted | Adjustments | Adjusted | ||||
Account Titles | Debit | Credit | Debit | Credit | Debit | Credit |
Cash | 3,100.00 | 3,100.00 | ||||
Accounts Receivable | 15,900.00 | 15,900.00 | ||||
Office Supplies | 4,200.00 | 3,550.00 | 650.00 | |||
Prepaid Rent | 9,500.00 | 7,200.00 | 2,300.00 | |||
Equipment | 625,000.00 | 625,000.00 | ||||
Accumulated Depreciation- Equipment | 104,000.00 | 35,250.00 | 139,250.00 | |||
Other Assets | 60,900.00 | 60,900.00 | ||||
Accounts Payable | 9,400.00 | 9,400.00 | ||||
Unearned Service revenue | 11,200.00 | 8,080.00 | 3,120.00 | |||
Notes Payable | 50,000.00 | 50,000.00 | ||||
Wages Payable | 1,450.00 | 1,450.00 | ||||
Interest Payable | 1,000.00 | 1,000.00 | ||||
Income Tax payable | 55,539.00 | 55,539.00 | ||||
Common Stock | 279,500.00 | 279,500.00 | ||||
Retained Earnings | 37,000.00 | 37,000.00 | ||||
Service revenue | 598,000.00 | 8,080.00 | 606,080.00 | |||
Wages Expense | 137,000.00 | 1,450.00 | 138,450.00 | |||
Rent Expense | 229,000.00 | 7,200.00 | 236,200.00 | |||
Interest Expense | 4,500.00 | 1,000.00 | 5,500.00 | |||
Supplies Expense | 3,550.00 | 3,550.00 | ||||
Depreciation-Equipment | 35,250.00 | 35,250.00 | ||||
Income Tax Expense | 55,539.00 | 55,539.00 | ||||
Total | 1,089,100.00 | 1,089,100.00 | 112,069.00 | 112,069.00 | 1,182,339.00 | 1,182,339.00 |
Income Statement | Amount $ |
Service Revenue | 606,080.00 |
Total Revenue | 606,080.00 |
Less: Operating Expenses | |
Wages Expense | 138,450.00 |
Rent Expense | 236,200.00 |
Interest Expense | 5,500.00 |
Supplies Expense | 3,550.00 |
Depreciation-Equipment | 35,250.00 |
Total Operating Expenses | 418,950.00 |
Income before tax | 187,130.00 |
Less: Income Tax Expense | 55,539.00 |
Net Income | 131,591.00 |
Statement of Retained Earnings | |
Retained Earnings- Opening | 37,000.00 |
Add: Net Income | 131,591.00 |
Less: Dividends Paid | - |
Retained Earnings- Closing | 168,591.00 |
Statement of Financial Position | Amount $ |
Cash | 3,100.00 |
Accounts Receivable | 15,900.00 |
Office Supplies | 650.00 |
Prepaid Rent | 2,300.00 |
Equipment | 625,000.00 |
Accumulated Depreciation- Equipment | (139,250.00) |
Other Assets | 60,900.00 |
Total Assets | 568,600.00 |
Liabilities | |
Accounts Payable | 9,400.00 |
Unearned Service revenue | 3,120.00 |
Wages Payable | 1,450.00 |
Interest Payable | 1,000.00 |
Income Tax payable | 55,539.00 |
Current Liabilities | 70,509.00 |
Notes Payable | 50,000.00 |
Non Current Liabilities | 50,000.00 |
Total Liabilities | 120,509.00 |
Common Stock | 279,500.00 |
Retained Earnings | 168,591.00 |
Total Equity | 448,091.00 |
Total Liabilities & Equity | 568,600.00 |
A ting Entries and Financial Statements enthe 00 DH Credit 15.900 Aconents Roodtratie 9.500 625.000 Prepaid...