Question

Critical Thinking 3-05 a Ayayai Park was organized on April 1, 2019, by Erica Hatt. Erica is a good manager but a poor accountant. From the trial baance prepared by a part-time bookkeeper, Erica prepared the following income statement for the quarter that ended March 31, 2020 Ayayaİ PARK Income Statement For the Quarter Ended March 31, 2020 Revenues Rent revenue $89,800 Operating expenses Advertising Salaries ad wages Utilities Depreciation Maintenance and repairs Total operating expenses $5,400 30,000 850 850 4,200 41,300 Net income $48,500 Erica thought that something was wrong with the statement because net income had never exceeded $21,000 in any one quarter. Knowing that you are an experienced accountant, she asks you to review the income statement and other data You first look at the trial balance. In addition to the account balances reported above in the income statement, the ledger contains the following additional selected balances at March 31, 2020 Supplies Prepaid Insurance Notes Payable $6,000 7,000 11,400
Question 2:

Answer 1

Solution: Q1 Ayayai Park Income statement For the quarter ended March 31,2020 Revenue Rent revenue Expenses Advertisin salaries and wages utilities Depreciation Maintenance and repairs supplies expense Insurance expense Interest expense Total expenses Net income wokrin Rent revenue Advertisin salaries and wages utilities Maintenance and repairs 4200+260 supplies expense nsurance expense nterest expense 89800-15100 5400+120 30000+320 850+170 74700 5520 30320 1020 850 4460 4200 1750 285 6000-1800 7000*3/12 11400*1096*3/12 48405 26295 Shee73 Shee74Sheet75 Sheed76 Sheet77 Sheet178 Sheet179 Sheet180 Sheet181 ENG 10:03 US 23/02/2019

solution: 02 Date Accounts title Debit lCredit 1 Dec 31 Utilities expense 455 Accounts payable 455 to record payable account) 2 Dec 31. salaries and wages expense 3000 salaries and wages payable to record accrued salaries and wages) 3000 3 Dec 31. Interest expense 200 Interest payable (48000.5%*1/12) to record interest used) 200 4 Dec 31. Account receivable Service revenue (to record service account) 290 290 5 Dec 31. Account receivable Rent revenue to record rent account) 6000 6000 시 (Sheet! 73 Sheet1 74 Sheet! 75 Sheet1 76 Sheet1 77 Sheet! 78 / Sheet1 79 Sheet1 80 | Sheet18L . . a ENG 1003 US 23/02/2019