Question

ZYX Merchandising Company was established on January 1, 2019. As of December 31, 2019, the following additional information is available:

1. $5.000 of Office Supplies has been used.
2. Accrued interest revenue is $10.000.
3. $15.000 of prepaid rent has expired as of December 31, 2019.
4. As of December 31, 2017, $20.000 of the Unearned Service Revenue is earned.

Questions:

1. Find the Marketing Expense for the year of 2019 (Hint: Write all the accounts to debit or credit sides while considering their nature. The total of debit and credit sides should be equal.)
2. Prepare and journalize the adjusting entries.
3. Prepare the adjusted trial balance.
4. Journalize the closing entries.
5. Prepare Income Statement and Statement of Financial Position (Balance Sheet) of XYZ Service Company in proper form.

Please answer the questions by showing each parts.

XYZ Merchandising Company Unadjusted Trial Balance December 13, 2019
Account	Balance
Bank	499,200
Interest Payable	480,000
Bank Loan (5 years)	1,472,000
Notes Receivable	896,000
Service Revenue	2,880,000
Cost of Service	1,536,000
Office Supplies	57,600
Accumulated Depreciation (Building)	896,000
Equipment	704,000
Marketing Expense	????
Building	1,280,000
Depreciation Expense (Building)	192,000
Interest receivable	240,000
Note payable (3 years)	800,000
Cash	89,600
Profit from sale of equipment	19,200
Account Receivable	364,800
Capital	2,464,000
Utilities Expense	614,400
Accounts Payable	448,000
Bank Loan (1 year)	160,000
Rent Expense	336,000
Prepaid Rent	16,000
Interest Expense	153,600
Accumulated Depreciation (Equipment)	576,000
Service discount	80,000
Land	2,560,000
Depreciation Expense (Equipment)	512,000
Interest Revenue	160,000
Insurance Expense	112,000
Unearned Service Revenue	224,000

Answer 1

ADJUSTING ENTRIES
Date	Particulars	Debit	Credit
1	Supplies expense	5000
	Office supplies		5000
	(office supplies used)
2	Accrued interest revenue	10000
	Interest revenue		10000
3	Rent expense	15000
	Prepaid rent		15000
	(rent expense)
4	Cash	20000
	Unearned service revenue		20000

ADJUSTED TRIAL BALANCE
	Particulars	Debit	Credit	Debit	Credit	Debit	Credit
	Bank	499,200				499200
	Interest Payable		480,000				480000
	Bank Loan (5 years)		1,472,000				1472000
	Notes Receivable	896,000				896000
	Service Revenue		2,880,000				2880000
	Cost of Service	1,536,000				1536000
	Office Supplies	57,600			5000	52600
	Accumulated Depreciation (Building)		896,000				896000
	Equipment	704,000				704,000
	Building	1,280,000				1,280,000
	Depreciation Expense (Building)	192,000				192,000
	Interest receivable	240,000		10000		250,000
	Note payable (3 years)		800,000				800000
	Cash	89,600		20000		109600
	Profit from sale of equipment		19,200				19200
	Account Receivable	364,800				364,800
	Capital		2,464,000				2,464,000
	Utilities Expense	614,400				614,400
	Accounts Payable		448,000				448,000
	Bank Loan (1 year)		160,000				160,000
	Rent Expense	336,000		15000		351000
	Prepaid Rent	16,000			15000	1000
	Interest Expense	153,600				153,600
	Accumulated Depreciation (Equipment)		576,000				576,000
	Service discount	80,000				80,000
	Land	2,560,000				2,560,000
	Depreciation Expense (Equipment)	512,000				512,000
	Interest Revenue		160,000		10000		170000
	Insurance Expense	112,000				112,000
	Unearned Service Revenue		224,000		20000		244000
	Marketing expense	336,000				336,000
	Supplies expense			5000		5000
	TOTAL	10,579,200	10,579,200	50,000	50,000	10,609,200	10,609,200

INCOME STATEMENT
Particulars	Amount	Amount
Revenue	2880000
(-) service discount	-80000
Net revenue		2800000
Add: Other income
Profit on sale of equipment	19200
Interest income	170000	189200
Total revenue		2989200
Less: Expenses
Cost of service	1536000
Depreciation ( Building)	192000
Utilities expense	614400
Interest expense	153600
Depreciation ( ewuipmnt)	512000
Insurance expens	112000
Rent expense	351000
Marketing expense	336000
Supplies expense	5000
total expenses		3812000
Net loss		-822800

BALANCE SHEET
Particulars		Amount
Assets
Current Assets
Cash	109600
Bank	499200
Office supplies	52600
Interest recivable	250000
Accounts receivable	364800
Prepaid rent	1000
Total Current Assets		1277200
Non current assets
Note receivable	896000
Equipment	704000
Less: Accumulated dpreciation	-576000
Building	1280000
Less: Accumulated dpreciation	-896000
Land	2560000
Total non current assets		3968000
TOTAL ASSETS		5245200
Liabilities and equity
Current Liabilities
Accounts Payable	448000
Interest Payable	480000
Bank loan	160000
Unearned service revenue	244000
Total Current Liabilities	1332000
Non Current Liabilities
Bank loan	1472000
Note payable	800000
Total Non current liabilities	2272000
Total Liabilites		3604000
Equity
Capital	2464000
Retained earnings	-822800
Total equity		1641200
Total liabilities and equity		5245200