Question

1. The following accounts at 12/31/2020 are listed in alphabetical order. Create a worksheet. Record the adjusting entries (info below) on the worksheet and complete the worksheet. Prepare a multiple step income statement, Statement of Retained Earnings and a Classified Balance Sheet for 2020.

Debit Credit 6,400 5,700 19,000 11,000 15,000 6,500 600 42,000 4,000 5,000 27,400 4,035 Account Payable Accounts Receivable Accumulated Depreciation - Building Accumulated Depreciation - Equipment Additional Paid in Capital Administrative Expenses Allowance for Dountful Accounts Buildings Common Stock, $1 par Cash Cost of Goods Sold Current Income Taxas Payable Dividends Equipment Income Tax Expense Interest Expense Interest Payable Inventory Land Note Payable (due March 2024) Prepaid Insurance Rent Revenue Retained Earings, January 1, 2020 Sales Revenue Selling Expenses Uneamed Rent Wages Payable Total 2,400 22,000 4,035 10,800 6,800 10,000 1,600 3,500 14,500 54,900 9,700 1,000 143,935 143,935

Adjustment information: (you may have to add accounts to the worksheet)

1. Accrue interest expense, $650.
2. Record depreciation, building - $4,200; equipment - $2,200.
3. Allowance for Doubtful Accounts should be $750.
4. Rent received in advance of $1000 for the year 2021 was recorded as Rent Revenue.

(You need to complete the entire worksheet and the formal financial statements.)

Answer 1

Accounts Adjustments Debit Credit WORKSHEET Unadjusted Trial Balance Debit Credit 6,400 5,700 19,000 11,000 15,000 6,500 600 4,200 2,200 750 750 42,000 Adjusted Trial Balance Debit Credit 6,400 5,700 23,200 13,200 15,000 6,500 1,350 750 42,000 4,000 5,000 27,400 4,035 2,400 4,200 2,200 22,000 4,035 650 4,000 5,000 27,400 4,035 Accounts payable Accounts receivable Accumulated depreciation-building Accumulated depreciation equipment Additional paid in capital Administrative expense Allowance for doubtful accounts Bad debt expense Buildings Common stock, $1 par Cash Cost of goods sold Current income tax payable Dividends Depreciation expense-building Depreciation expense-equipment Equipment Income tax expense Interest expense Interest payable Inventory Land Notes payable Prepaid insurance Rent revenue Retained earnings Sales revenue Selling expense Unearned rent Wages payable Total 2,400 4,200 2,200 22,000 4,035 650 650 650 10,800 6,800 10,800 6,800 10,000 10,000 1,600 1,600 (1,000) 3,500 14,500 54,900 2,500 14,500 54,900 9,700 9,700 1,000 1,000 $ 143,935 $ 143,935 $ 1,000 1,000 151,735 7,800 $ 7,800 $ 151,735$ Explanation: Adjusted Trial Balance = Unadjusted Trial Balance plus Adjustments

54,900 27,400 27,500 Income Statement For the Year Ended December 31, 2020 Sales revenue Less: Cost of goods sold Gross income Less: Operating expense: Administrative expense 6,500 Bad debt expense 7501 Depreciation expense-building 4,2001 Depreciation expense-equipment 2,2001 Selling expense 9,700 5,000 10,800 4.350 1,600 21,750 18,800 Total operating expense Operating income (EBIT) Less: Interest expense Add: Rent revenue EBT Less: Income tax expense Net income 23,350 4,150 650 2,500 6,000 4,035 1,965 Balance Sheet For the Year Ended December 31, 2020 Assets Current assets: Cash Inventory Accounts receivable 5,700 Less: Allowance for doubtful accounts 1,350 Net accounts receivable Prepaid insurance Total current assets Fixed assets: Buildings 42,000 Less: Accumulated depreciation-building 23,200 Equipment 22,000 Less: Accumulated depreciation equipment 13,200 Land Total fixed assets Total assets Liabilities and Shareholders' Equity Current liabilities: Accounts payable Current income tax payable Interest payable Unearned rent Wages payable Total current liabilities Long-term liabilities: Notes payable Total long-term liabilities Shareholders' equity Common stock, $1 par Additional paid in capital Retained earnings Total shareholders' equity Total liabilities and shareholders' equity 8,800 6,800 34,400 56,150 $ $ Statement of Retained Earnings For the Year Ended December 31, 2018 14,500 1,965 Beginning balance Add: Net income Less: Dividend Ending balance 6,400 4,035 6501 1,000 1,000 13,085 2,400 $ 14,065 Explanation: Taking the balance from the adjusted trial balance. 10,000 10,000 4,000 15,000 14,065 33,065 56,150 $ Please give likes for the work. Thanks & Regards.