Question

The un-adjusted trial balance of Property Incorporated appears below as of December 31, 2019.

Property Incorporated

Un-adjusted Trial Balance

December 31, 2019

Debit Credit

Cash $274,750

Accounts Receivable 120,000

Prepaid Insurance 11,250

Supplies 37,500

Plant 140,000

Accumulated Depreciation - plant $ 14,000

Accounts Payable 82,500

Unearned Service revenue 73,500

Common stock 207,500

Retained Earnings 127,500

Dividends 7,500

Service Revenue 198,500

Salary Expense 61,500

Utilities expense 27,000

Rent Expense 15,000

Postage 9,000

Additional Data are as follows:

a. Supplies used during the current year amount to $25,250

b. Accrued salaries on December 31, 2019, amount to $3,750

c. Unearned service revenue earned during the years amounts to $26,250

d. Depreciation for the current year amounts to $5,000

e. Prepaid insurance expired as of December 31, 2019, amounts to $5,500

Based on the un-adjusted trial balance and the additional data:

Prepare for Property Incorporated:

a) The adjusting entries necessary to account to the additional data

b) The adjusted Trial Balance

c) The following Financial Statements for the year ended December 31, 2019

- Income Statement

- Statement of Retained Earnings

- Balance Sheet

Answer 1

Credit Date Dec 31 Account Titles and Explanation Supplies Expense Supplies Debit 25,250 25,250 Dec 31 3,750 Salaries Expense Salaries Payable 3,750 Dec 31 26,250 Unearned Service Revenue Service Revenue 26,250 Dec 31 5,000 Depreciation Expense Accumulated Depreciation 5,000 Dec 31 5,500 Insurance Expense Prepaid Insurance 5,500 Adjustments Debit Credit 5,500 25,250 5,000 Property Incorporation Worksheet Trial Balance Debit Credit 274,750 120,000 11.250 37,500 140,000 14,000 82,500 73,500 207,500 127,500 7,500 198,500 61,500 27,000 15,000 9,000 Cash Accounts Receivable Prepaid Insurance Supplies Plant Accumulated Depreciation Accounts Payable Unearned Service Revenue Common Stock Retained Earnings Dividends Service Revenue Salaries Expense Utility Expense Rent Expense Postage Expense Supplies Expense Depreciation Expense Insurance Expense Salaries Payable 26.250 Adjusted Trial Debit Credit 274,750 120,000 5,750 12.250 140,000 19,000 82,500 47,250 207,500 127,500 7,500 224,750 65.250 27,000 15,000 9,000 25,250 5,000 5,500 3,750 26.250 3,750 25,250 5,000 5,500 3,750 703,500 703,500 65,750 65,750 712,250 712,250 224,750 Property Incorporation Income Statement For the Month Ended December 31, 2019 Revenue Service Revenue Expenses Salaries Expense 65.250 Utility Expense 27,000 Rent Expense 15,000 Postage Expense 9,000 Supplies Expense 25,250 Depreciation Expense Insurance Expense 5,500 Total Expenses Net Income (loss) 5,000 152,000 72,750 Property Incorporation Retained Earnings Statement For the Month Ended December 31, 2019 Retained Earnings. Beginning Add: Net Income (loss) for the year $127,500 $72,750 $200,250 $7,500 $192,750 Less: Dividend Retained Earnings. Ending Property Incorporation Balance Sheet December 31, 2019 Assets Current Assests Cash Accounts Receivable Prepaid Insurance Supplies Total current assets Property, plant, and equipment Plant Less: Accumulated Depreciation Total Assets 274,750 120,000 5,750 12.250 412,750 140,000 19,000 121,000 533,750 Liabilities and Stockholders' Equity Current Liabilities Accounts Payable 82,500 Unearned Service Revenue 47.250 Salaries and Wages Payable 3,750 Total Current Liabilities Stockholders' Equity Common Stock 207,500 Retained Earnings 192,750 Total Stockholders' Equity Total Liabilities and Stockholders' Equity 133,500 400.250 533,750