Question

ONLY NEED PART B

Comprehensive Problem (Part B) Requirement 1 Record the following month end adjusting entries for Bella Construction, Inc. at March 31, 2020. Post the transactions to the T-accounts. Month end adjusting entries at March 31, 2020: 1) Accrued construction revenue at March 31, $7,500. 2) Had $1,100 of supplies on hand at the end of March. 3) Accrued salary expense of $2,680 at March 31 for Monday, Tuesday, Wednesday, and Thursday. The payroll will be paid on the following Friday 4) The equipment has a salvage value of $1,500, with an expected life of 4 years and is depreciated based on the straight-line method. Book depreciation for the month of December. 5) The truck has a salvage value of $3,000, with an expected life of 5 years and is depreciated based on the straight-line method. Book depreciation for the month of March. 6) Accrued interest revenue for the note receivable, $30. 7) Amortize one month of insurance. (Amortize means to show the use of, in which you need to adjust the account) 8) Amortize March's rent that prepaid in February. Requirement 2 Prepare adjusted trial balance for Bella Construction at March 31, 2020. Requirement 3 Prepare the following financial statements; Income Statement, Statement of Retained Earnings, and Balance Sheet. Extra Credit (15 points) Prepare the month end closing entries at March 31, 2020.

Answer 1

Credit Calculation Adjusting entries Date Account 31-Mar Accounts Receivable Service Revenue Debit $ 7,500 $ 7,500 $ 2,400 =3,500-1,100 31-Mar Supplies expense Supplies $ 2,400 $ 2,680 31-Mar Salaries expense Salaries Payable $ 2,680 $ 650 =(32,700-1,500)/4*1/12 31-Mar Depreciation expense Accumulated Depreciation Equipment $ 650 $ 600 = (39,000-3,000)/5*1/12 31-Mar Depreciation expense Accumulated Depreciation-Truck $ 600 $ 30 31-Mar Interest Receivable Interest revenue $ 30 $ 175 =2,100/12 31-Mar Insurance expense Prepaid Insurance $ 175 $ 3,000 31-Mar Rent expense Prepaid Rent $ 3,000

Credit Credit Date Debit Date Credit Accounts Receivable Op bal $ 7,600 12-Mar $ 5,000 11-Mar $ 6,500 18-Mar $ 2,600 31-Mar $ 7,500 Date Debit Date Notes Receivable 12-Mar $ 5,000 Bella Construction T Accounts Date Debit Date Credit Cash Op bal $ 7,000 5-Mar $ 2,100 2-Mar $ 65,000 11-Mar $ 6,700 4-Mar $ 5,700 17-Mar $ 420 18-Mar $ 2,600 22-Mar $ 340 29-Mar $ 5,500 23-Mar $ 32,700 25-Mar $ 6,700 29-Mar $ 3,000 30-Mar $ 3,500 Date Debit Date Interest Receivable 31-Mar $ 30 Bal. $ 30 Bal. $30,340 Prepaid Rent Op bal $3,000 29-Mar $ 3,000 31-Mar $ 3,000 Bal. $ 14,000 Prepaid Insurance 5-Mar $ 2,100 31-Mar $ Bal. $ 5,000 Supplies 3-Mar $ 3,500 31-Mar $ 2,400 175 Bal. $ 3,000 Truck 7-Mar $ 39,000 Bal. $ 1,925 Accumulated Depreciation-Truck 31-Mar $ 600 1 Bal. $ 1,100 Equipment 3-Mar $ 32,700 Accumulated Depreciation Equipment 31-Mar $ 650 Bal. $ 650 Bal. $ 39,000 Accounts Payable 23-Mar $ 32,700 3-Mar $ 36,200 7-Mar $ 39,000 Bal. $ 600 Salaries Payable 11-Mar $ 670 Op bal $ 670 31-Mar $ 2,680 $ 32,700 Common Stock Op bal $10,000 2-Mar $ 65,000 Bal. Retained Earnings Op bal $ 6,930 $ 2,680 $ 75,000 $ 6,930 Bal. Salaries expense 11-Mar $ 6,030 25-Mar $ 6,700 31-Mar $ 2,680 Bal. Telephone Expense 17-Mar $ 420 Bal. $ 42,500 Service Revenue 4-Mar $ 5,700 11-Mar $ 6,500 29-Mar $ 5,500 31-Mar $ 7,500 Bal. Utilties expense 22-Mar $ 340 $25,200 Bal. Supplies expense 31-Mar $ 2,400 Bal. $ 15,410 Depreciation expense 31-Mar $ 650 31-Mar $ 600 Bal. $ 420 Insurance expense 31-Mar $ 175 Bal. $ 340 Rent expense 31-Mar $ 3,000 Bal. Bal. $ 175 Bal. $ 3,000 $ 2,400 Interest revenue 31-Mar $ Bal. $ 1,250 Dividends 30-Mar $ 3,500 30 Bal. $ 30 Bal. $ 3,500

Adjusted TB Debit Credit 30,340 14,000 5,000 30 3,000 1,925 1,100 39,000 600 32,700 Bella Construction Account Names Cash Accounts Receivable Notes Receivable Interest Receivable Prepaid Rent Prepaid Insurance Supplies Truck Accumulated Depreciation-Truck Equipment Accumulated Depreciation Equipment Accounts Payable Salaries Payable Common Stock Retained Earnings Dividends Service Revenue Salaries expense Telephone Expense Utilties expense Supplies expense Depreciation expense Insurance expense Rent expense Interest revenue Totals 650 42,500 2,680 75,000 6,930 3,500 25,200 15,410 420 340 2,400 1,250 175 3,000 30 153,590 153,590

25,200 Bella Construction Income Statement For Month ended March 31, 2020 Revenues Service Revenue Operating expenses Salaries expense Telephone Expense Utilties expense Supplies expense Depreciation expense Insurance expense Rent expense Total Operating expenses Operating Income Interest revenue Net Income 15,410 420 340 2,400 1,250 175 3,000 22,995 2,205 30 2,235 Statement of Retained Earnings For Month ended March 31, 2020 Beginning balance, March 1, 2020 Net Income 6,930 2,235 9,165 (3,500) 5,665 Less Dividends Ending Balance, March 31, 2020

Bella Construction Balance Sheet As of March 31, 2020 Assets Current Assets Cash Accounts Receivable Notes Receivable Interest Receivable Prepaid Rent Prepaid Insurance Supplies Total Current Assets 30,340 14,000 5,000 30 3,000 1,925 1,100 55,395 38,400 Property, Plant & Equipment Truck Accumulated Depreciation-Truck Equipment Accumulated Depreciation Equipment Total Property, Plant & Equipment Total Assets 39,000 (600) 32,700 (650) 32,050 70,450 125,845 Liabilities & Stockholders Equity Current Liabilities Accounts Payable Salaries Payable Total Current Liabilities 42,500 2,680 45,180 Stockholders Equity Common Stock Retained earnings Total Stockholders Equity Total Liabilities & Stockholders Equity 75,000 5,665 80,665 125,845

Credit Closing entries Date Account 31-Mar Service Revenue Interest revenue Income Summary Debit $ 25,200 $ 30 $ 25,230 $ 22,995 31-Mar Income Summary Salaries expense Telephone Expense Utilties expense Supplies expense Depreciation expense Insurance expense Rent expense $ $ $ $ $ $ $ 15,410 420 340 2,400 1,250 175 3,000 $ 2,235 31-Mar Income Summary Retained Earnings $ 2,235 $ 3,500 31-Mar Retained Earnings Dividends $ 3,500

WORKINGS Below:-

Credit Calculation Bella Construction Journal entries Date Account 2-Mar Cash Common stock (To record issue of common stock for cash) Debit $ 65,000 $ 65,000 3-Mar Supplies $ 3,500 Equipment $ 32,700 Accounts Payable (To record purchase of supplies & equipment on account) $ 36,200 5,700 4-Mar Cash $ Service Revenue (To record construction services provided for cash) $ 5,700 $ 2,100 5-Mar Prepaid Insurance Cash (To record insurance expenses paid in advance) $ 2,100 $ 39,000 7-Mar Truck Accounts Payable (To record purchase of truck on account) $ 39,000 $ $ 670 6,030 =6,700-670 11-Mar Salaries Payable Salaries expense Cash (To record payment of Salaries) $ 6,700 $ 6,500 11-Mar Accounts Receivable Service Revenue (To record contruction services billed) $ 6,500 12-Mar Notes Receivable $ 5,000 Accounts Receivable $ 5,000 (To record issue of notes receivable for extension of invoice due today) $ 420 17-Mar Telephone Expense Cash (To record payment of telephone expenses) $ 420 $ 2,600 18-Mar Cash Accounts Receivable (To record cash received from customer) $ 2,600 340 22-Mar Utilties expense $ Cash (To record payment of water & electricity expenses) $ 340 23-Mar Accounts Payable $ 32,700 Cash (To record cash paid for equipment purchased on Dec 3) $ 32,700 $ 6,700 25-Mar Salaries expense Cash (To record payment of salaries expenses) $ 6,700 $ 5,500 29-Mar Cash Service Revenue (To record cash received for repair of pipes) $ 5,500 $ 3,000 29-Mar Prepaid Rent Cash (To record payment of rent expense due April 5) $ 3,000 $ 3,500 30-Mar Dividends Cash (To record payment of dividends) $ 3,500

Unadjusted TB Debit Credit 30,340 6,500 5,000 6,000 2,100 3,500 39,000 32,700 42,500 Bella Construction Account Names Cash Accounts Receivable Notes Receivable Interest Receivable Prepaid Rent Prepaid Insurance Supplies Truck Accumulated Depreciation-Truck Equipment Accumulated Depreciation Equipment Accounts Payable Salaries Payable Common Stock Retained Earnings Dividends Service Revenue Salaries expense Telephone Expense Utilties expense Supplies expense Depreciation expense Insurance expense Rent expense Interest revenue Totals 75,000 6,930 3,500 17,700 12,730 420 340 142,130 142,130