Question

8:45 Done Assignment 2 - Chapter 3_37597... Assignment #2 - Chapter 3 Com 204 September 2020 Question 2 Given the adjusted trial balance for Bobs Donuts Inc. below as of December 31, 2020 prepare: 1. The income statement 2. The statement of retained earnings 3. Closing entries for December 31, 2020. Financial Statements must include appropriate headings. No explanations are required for the closing entries. (provide answers in the templates below). (27 marks) Bobs Dorus ne Adjusted Trial Balance December 31, 2019 C Accounts 12.000 1.200 $17.000 0 3.000 3.300 Accumulated depreciation equipment Accounts payable Unerred or Salay payable Commons Dividends Service Advertungen Depreciation expense 0.700 5.000 50.000 7.000 Uspense Wag expense 1.300 400 13.000 SINTO

Answer 1

Solution of Question 1: Journal Entries in the books of pine centre mall limited.

Que:1 CREDIT $ DATE 1 oct |2020 Journal Entries in the books Of Pine centre mall Ltd. PARTIWLARS DEBIT $ Insurance premium 1200 prepaid Insurance premium - Dr (see note: 1) 3600 Bank AIC (being Insurance transaction recorded) Dr 12 cr 4800 1. Nov 2020 3000 6000 2) Reut Dr Prepaid rent Dr (see note: 1) Bank .cr (being reut paid for current & next period) 9000 31] Dece/2020 Dr 2500 customers service revenue-er (being revenue accrued) 2500 3) (4) No Entry its not a trompaction Dr 950 31/Dec/2020 4) 950 Interest Outstanding Interest - er (being Outstandig unpaid) Interest recorded

650 31 Dec 2020 5 650 salaries & Bonus salaries & Bonus payable-ch (beis salaries dure but not paid) 3000 -Dr - en 3000 uneemed revenue Account 6) Service revenue Ale с 31/Dec/2020 (being unearned revenues transferred to earned revenes 7) 10000 3ilbec/2020 10,000 Depreciation Account of Equipment Account en (being depreciation charged NOTE: 1 Since the insurance was paid for period covening next period also, it cellll be recorded as prepaidd expense October November December 3 months and rest of period in 12 monthe Mooncanel penod welll be from next period (ie gmonty $ 4800 $2.600 prepaid 12 x9 Same goes with rent (a monte from Current & 4 monttie from next period 9000 x *4 = 6000 (as prepaid . 6

Answer of Question 2: Income statement, Retained Earnings statement, journal entries in the books of Bob Donuts Inc

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Que: 2 (1) Income statement of Bob Donute Inc. ou on 31st December 2010) Particulars Amounts Revenues:- service Revenue 50,000 TOTAL REVENUES (A) 50,000 Expenses: Administrative Expenses Advertising Expenses Depreciation Expenses Supplies Expenses utilities Expenses Wages Expenses TOTAL EXPENSEL (B) 8,300 7,000 8,500 1,300 9,400 13,000 47,500 NET INCOME (A-B) 2 500

2. Statement of Retained Earnings Previous Balance of Retained Earnings Profits made during the year ADD: LESS: $ 80700 $ 2500 5000 Dividende $ 78,200 NET RETAINED EARNINGS (to be transferred tog Balance sheet How CLOSING ENTRIES FOR 31S+ DECEMBER 2020 JOURNAL ENTRIES. Date Particulars. DEBIT CREDIT 31st Dec. 20 47,500 DO ur cr 8,300 7,000 8,500 1,300 9,400 13,000 ch Income / Profit & Loss statement Administrative Expenses Advertising Expenses Depreciation Expenses Supplies Expenses utilities Expenses Wages expenses (being expenses traneferred to income statement) Service Revenue Ale De Income / Profit & 10ss statement-et (being income transferred to Income statement) 31st Dec 20 50,000 50,000 31st Decco 5000 5000. Retained Earnings en Dividends (being dividende distributeel out of retained earnings