Question

Please help me solve this. I am so stumped

Required information Bill's Boards (BB) is an outdoor advertising company founded by William Longfall William knows very little accounting so he hired a friend to keep the books" Unfortunately, William did not review his friend's work and now it seems his friend has made a mess of the accounting records. William has provided you the following list of unadjusted account balances at BB's September 30 fiscal year-end. You have reviewed the balances with William and made notes shown in the right column Account Name Cash Accounts Receivable Prepaid Rent Supplies Equipment Accumulated Depreciation Accounts Payable Deferred Revenue BILL'S BOARDS Un adjusted Trial Balance At September 30 Debits Credits Notes $ 10,500 This balance equals the balance reported by the bank. 820 A customer ordered 5620 of advertising services to be provided in October. The accountant recorded this service by debiting Accounts Receivable and crediting Service Revenue. Starting January 1, BB agreed to pay $1,088 cash to rent the land on which its billboards are located, for the January-December period. The accountant adjusted this account on April 30 but has not adjusted it since. BB still has supplies costing $212 on hand on September 30. 6,400 BD bought scaffolding and billboards in October last year. • Because the equipment was bought at the beginning of the fiscal year, no depreciation is carried forward from prior years. 2,210 BB purchased and received $2,210 of supplies used for creating advertising displays. The supplier is to be paid in October 1,599 This balance relates to $1,590 cash paid by a customer in August for advertising from September 1- November 30. B BB's employees are still waiting to be paid for the last half of September. 310 BB hasn't paid the 3310 tax owed from the last fiscal year. 1,410 BB has issued 2,820 shares for $1,410 cash. 5,320 BB started business a few years ago, so this is the total accumulated earnings up to October 1 of last year. 58,020 BB has provided $2,810 of services for which it hasn't yet billed customers or recorded in its accounting records. 46,700 BB's employees earn $4,700 per month. The employees were paid in full on August 31, and were paid again on September 15. About $1,600 of the usefulness of the equipment's $6,400 cost has been used up during the current fiscal year. 610 BB Incurs a small cost to rent the land on which its billboards are located. Rent for the current year has been paid in full. 3,110 BB's accountant expensed $3,110 of supplies purchased Salaries and Wages Payable Income Tax Payable Common Stock Retained Earnings Service Revenue Salaries and Wages Expense Depreciation Expense Rent Expense Supplies Expense

Answer 1

Bill Board's Adjusting Enteries Date Particulars Sep-30 Service Revenue a/c To Accounts Receivable (Entry reversed) Dr. Debit in $ Credit in $ 820 820 450 Sep-30 Rent Expense a/c Dr. To prepaid Rent (Rent Expensed) 1080 / 12 = 90 x 5 450 Dr. 210 Sep-30 Supplies a/c To Supplies expense (Correction entry) 210 Sep-30 Depreciation expense a/c Dr. To Accum. Depre - Equip. (To record depreciation) 1600 530 Sep-30 Deferred Revenue a/c Dr. To Service Revenue (Revenue recognized) 1590/3 530 Dr. 2810 Sep-30 Accounts Receivable a/c To Service Revenue (Revenue billed) 2810 2350 Sep-30 Salaries and Wages Expense a/c Dr. To Salaries and Wages Payable (Salary accrued) 4700/2 2350 Dr. 1186 Sep-30 Income Tax Expense a/c To Income Tax Payable (Income Tax accrued) 1186

Worksheet For the period ending Dec 31 Particulars Cash Accounts Receivable Prepaid Rent Supplies Equipment Accum. Depre - Equipment Accounts Payable Deferred Revenue Salaries and Wages Payable Income Tax Payable Common Stock Retained Earnings Service Revenue Salaries and Wages Expense Depreciation expense Rent Expense Supplies expense Income Tax Expense Totals Unadjusted Adjustments Adjusted Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 10500 10500 820 2810 820 2810 720 450 270 210 210 6400 6400 1600 1600 2210 2210 1590 530 1060 2350 2350 310 1186 1496 1410 1410 5320 5320 58020 820 3340 60540 46700 2350 49050 1600 1600 610 450 1060 3110 210 2900 1186 1186 6886068860 9956 9956 75986 75986 60540 Statement of Income For the period ending Dec 31 Service Revenue Less: Salaries and Wages Expense Depreciation expense Rent Expense Supplies expense 49050 1600 1060 2900 54610 5930 -1186 4744 Income Tax Expense @ 20% Net Income Statement of Retained Earnings For the period ending Dec 31 Beginning Balance Net Income Ending Balance 5320 4744 10064

Amounts in $ Amounts in $ Balance sheet As at Dec 31 Assets Current Assets Cash Accounts Receivable Prepaid Rent Supplies Amounts in $ Amounts in $ Liabilities Current Liabilities 10500 Accounts Payable 2810 Deferred Revenue 270 Salaries and Wages Payable 210 13790 Income Tax Payable 2210 1060 2350 1496 7116 Non Current Assets Equipment Accum. Depre - Equipment Total Assets 6400 -1600 Shareholders Equity Common Stock 4800 Retained Earnings 18590 Total Liabilities & Equity 1410 10064 11474 18590