Question

CV 4.1 Chapter 4 Canvas Homework Firefly, Inc began operations in January 2018. Below is the Adjusted Trial Balance as of December 31, 2018. This trial balance is scrambled, with the accounts in random order, but all debits and credits are correct. Complete the following: 1) For each account, label which financial statement it will appear (Income Statement, Balance Sheet, or Statement of Retained Earnings). Additionally, if it is an Income Statement account, label it as a Revenue or Expense. If it is a Balance Sheet account, label it with its proper classification (Current Asset, Long Term Investment, Property/Plant/Equipment, Intangible, Current Liability, Long Term Liability, or Equity). 2) Prepare the income Statement, Statement of Retained Earnings, and Classified Balance Sheet for Firefly, Inc for the year ending December 31, 2018. 3) Prepare all closing entries in proper order. 4) Prepare Post-Close Trial Balance. Firefly, Inc. Adjusted Trial Balance at December 31, 2018

Answer 1

Answer to Question 1:

Account Title Building Utility Expense Prepaid Insurance Common Stock Interest Payable Salary Payable Interest Expense Accounts Receivable Notes Payable (2 years) Supply Expense Unearned Revenue Insurance Expense Supplies Salary Expense Cash land Adjusted Trial Balance Debit Credit Financial Statement Classification $ 550,000 Balance Sheet Property/Plant/Equipment $ 4,700 Income Statement Expense $ 7,300 Balance Sheet Current Asset $ 400,000 Balance Sheet Equity $ 1,700 Balance Sheet Current Liability $ 5,600 Balance Sheet Current Liability $ 24.000 Income Statement Expense $ 23,700 Balance Sheet Current Asset $ 350,000 Balance Sheet Long term Liability $ 10,500 Income Statement Expense $ 22,500 Balance Sheet Current Liability 12,800 Income Statement Expense $ 2,800 Balance Sheet Current Asset $ 98,000 Income Statement Expense $ 165,400 Balance Sheet Current Asset $ 300,000 Balance Sheet Property/Plant/Equipment Accumulated Depreciation - Building Service Revenue Accounts Payable $ IS $ 26,000 Balance Sheet Property/Plant/Equipment 560,000 Income Statement Revenue 34,400 Balance Sheet Current Liability Statement of Retained Earnings Equity Income Statement Expense 1,400,200 Dividends Depreciation Expense Total $ 175,000 $ 26,000 $ 1,400,200 $

Answer to Question 2:

$ 560,000 $ 560,000 Firefly Inc. Income Statement For the year ended December 31, 2018 Service Revenue Total Revenue Expenses: Utility Expense $ 4,700 Interest Expense $ 24,000 Supply Expense $ 10,500 Insurance Expense $ 12,800 Salary Expense $ 98,000 Depreciation Expense $ 26,000 Total Expenses Net Income $ 176,000 $ 384,000 (560,000 - 176,000) Retained Earnings Statement For the year ended December 31, 2018 Opening Balance Add: Net income $ 384,000 Less: Dividends $ 175,000 Closing Balance $ 209,000 (384,000 - 175,000)

Answer to Question 2:

Firefly Inc. Balance Sheet As December 31, 2018 Amounts Current Assets Cash Accounts Receivable Supplies Prepaid Insurance Total Current Assets $ $ $ 165,400 23,700 2,800 7,300 199,200 $ $ 300,000 550,000 $ Property, Plant and Equipment Land Building Less: Accumulated Depreciation - Building Total Property, Plant and Equipment (26,000) 824,000 Total Assets $ 1,023,200 (199,200 + 824,000)

Answer to Question 2:

Liabilities and Stockholders' Equity Current Liabilities Accounts Payable Interest Payable Salary Payable Unearned Revenue Total current liabilities $ $ $ $ $ 34,400 1,700 5,600 22,500 64,200 Long term liabilities Notes Payable Total long term liabilities $ $ 350,000 350,000 Total liabilities $ 414,200 (64,200 + 350,000) Stockholders' equity Common stock Retained earnings Total stockholders equity Total liabilities and stockholders $ $ $ 400,000 209,000 609,000 $ 1,023,200 (414,200 + 609,000)

Answer to Question 3:

Debit Credit Date Account Title Closing Entry for Revenue: 31-Dec Service Revenue Income Summary (To record closing entry for revenue) $ 560,000 $ 560,000 $ 176,000 31-Dec Income Summary Utility Expense Interest Expense Supply Expense Insurance Expense Salary Expense Depreciation Expense - (To record closing entry for expenses) $ $ $ $ $ $ 4,700 24,000 10,500 12,800 98,000 26,000 31-Dec Income Summary $ 384,000 (560,000 - 176,000) Retained earnings $ 384,000 (To transfer net income to retained earnings) $ 175,000 31-Dec Retained Earnings Dividends (To record closing entry for dividends) $ 175,000

Answer to Question 4:

Credit Debit $ 165,400 23,700 $ 2,800 $ 7,300 $ 300,000 $ 550,000 Firefly Inc Post Closing Trial Balance Account Title Cash Accounts Receivable Supplies Prepaid Insurance Land Building Accumulated Depreciation - Building Accounts Payable Interest Payable Salary Payable Unearned Revenue Notes Payable Common Stock Retained Earnings Total $ IS $ $ $ $ $ $ 26,000 34,400 1,700 5,600 22,500 350,000 400,000 209,000 1,049,200 $ 1,049,200