Question

Credits Debits 30,000 40,000 1,500 60,000 20,000 0 2,000 6,000 80,000 Account Title Cash Accounts receivable Supplies Inventory Notes receivable Interest receivable Prepaid rent Prepaid insurance Office equipment Accumulated depreciation Accounts payable Salaries payable Notes payable Interest payable Deferred sales revenue Common stock Retained earnings Dividends Sales revenue Interest revenue Cost of goods sold Salaries expense Rent expense Depreciation expense Interest expense Supplies expense Insurance expense 30,000 31,000 0 50,000 0 2,000 60,000 28,500 4,000 146,000 0 70,000 18,900 11,000 0 0 1,100 0

Answer 1

*Mistakes- Highlighted in Yellow.

1* Gross Profit wrongly placed in the next row.

2*Remove Utilites expenses column.

3. Net Income = $24,133. in total shareholders equity.

4. Prepaid Rent=$1,000;

5.Prepaid Insurance=$1,500;

6. Change the description to  Deferred sales revenue.

7. Notes payable = $50,000 is correct only.

a. Complete WorkSheet Credit Adjusting entries: No Account and explanation 1 Depreciation Expense Accumulated Depreciation-Repairs Equipment (To record the depreciation expense) Debit $ 10,000 Account Particulars $10,000 $ 1,500 2 Salaries Expense Salaries payable (To record the accrued salaries expense) $ 1,500 $ $ 1,500 6,000 4.500$ 3 Interest Expense Interest payable (To record the accrued interest expense $50,000*12%*3/12] $ 1,500 $ 1,333 4 Interest Receivable Interest Revenue (To record the deferred interest expense)[$20,000*8%*10/12] $ 1,333 Cash Accounts Receivable Supplies Inventory Notes receivbale Interest receivable Prepaid Rent Prepaid Insurance Office Equipment Accumulated Depreciation Accounts Payable Salaries payable Notes payable Interest payable Deferred sales revenue Common stock Retained Earnings Dividends Sales Revenue Interest revenue Cost of goods sold Salaries expense Rent expense Depreciation expense Interest expense Supplies expense Insurance expense Advertising expense Total Trial Balance Debit Credit $ 30,000 $ 40,000 $ 1,500 $ 60,000 $ 20,000 $ $ $ 2,000 $ $ 80,000 $ 30,000 $ 31,000 $ $ 50,000 $ $ 2,000 $ 60,000 $ 28,500 $ 4,000 $ 146,000 $ $ 70,000 $ 18,900 $ 11000 $ $ - $ $ $ $ 1,100 $ $ $ $ 3,000 $ 347,500 $ 347,500 $ Adjustedments Adjusted T/B Debit Credit Debit Credit $ 30,000 $ 40,000 $ 700 $ 800 $ 60,000 $ 20,000 1,333 $ 1,333 $ 1,000 $ 1,000 $ $ 1,500 $ 80,000 $ 10,000 $ 40,000 $ 31,000 $ 1,500 $ 1,500 $ 50,000 $ 1,500 $ 1,500 $ 2,000 $ $ 60,000 $ 28,500 $ 4,000 $ 146,000 $ 1,333 $ 1,333 $ 70,000 1,500 $ 20,400 1,000 $ 12,000 10,000 $ 10,000 1,500 $ 1,500 700 $ 1,800 4,500 $ 4,500 $ 3,000 20,533 $ 20,533 $ 361,833 $ 361,833 $ 4,500 5 Insurance Expense Prepaid Insurance (To record the insurance expense) ($6,000*9/12) $ 4,500 $ 700 6 Supplies Expense Supplies (To record the supplies expense) ($1,500-$800] 700 7 No entry $ 1,000 8 Rent Expense Prepaid Rent (To record the rent expenses) $ 1,000

Pastina Company Statement of Stockholders' Equity For the Months Ending Dec,31,2021 Common Stock Retained Earnings Total SH Equity Balance at January 1,2021 $ 60,000 $ 28,500 $ 88,500 Add: Net Income $ 24,133 $ 24,133 Less: Dividends $ $ 4,000 $ 4,000 Balance at December 31,2021 $ 60,000 $ 48,633 $ 108,633 Pastina Company Income Statement For the Months Ending Dec,31,2021 Sales Revenue $ 146,000 Less: Cost of goods sold $ 70,000 Gross Profit $ 76,000 Operating expenses: Salaries expense $ 20,400 Rent expense $ 12,000 Depreciation expense $ 10,000 Supplies expense $ 1,800 Insurance expense $ 4,500 Advertising expense $ 3,000 Total Operating expenses $ 51,700 Operating Income $ 24,300 Other income (expense) Interest revenue $ 1,333 Interest expenses $ 1,500 Total Other revenues and expenses - $ 167 Net Income $ 24,133

$ 30,000 $ 20,000 $ 1,333 $ 40,000 $ 800 $ 60,000 $ 1,000 $ 1,500 $ 154,633 Pastina Company Balance Sheet Dec 31,2021 Assets: Current Assets Cash Notes receivbale Interest receivable Accounts Receivable Supplies Inventory Prepaid Rent Prepaid Insurance Total Current Assets Property,plant and Equipment Office Equipment Less: Accumulated depreciation Total Property,Plant and Equipment Total Assets Liabilities: Current Liabilities Accounts Payable Salaries payable Notes payable Interest payable Deferred sales revenue Total Current Liabilities Shareholders Equity: Common Stock Retained Earnings Total Stockholders Equity Total Liablities and Stockholders' Equity $ 80,000 - $ 40,000 $ 40,000 $ 194,633 $ 31,000 $ 1,500 $ 50,000 $ 1,500 $ 2,000 $ 86,000 $ 60,000 $ 48,633 $ 108,633 $ 194,633 $

Post-Closing Trail Balance Account Particulars Sl. Credit 1 Closing Entries Closing Entries Particulars Sales Revenue Interest Revenue Income Summary (To close the revenue account to income summary) Debit $ 146,000 $ 1,333 $ 147,333 2 $ 123,200 Income Summary Cost of goods sold Salaries expense Rent expense Depreciation expense Interest expense Supplies expense Insurance expense Advertising expense (To close the expense account to income summary) $ 70,000 $ 20,400 $ 12,000 $ 10,000 $ 1,500 $ 1,800 $ 4,500 $ 3,000 Cash Accounts Receivable Supplies Inventory Notes receivbale Interest receivable Prepaid Rent Prepaid Insurance Office Equipment Accumulated Depreciation Accounts Payable Salaries payable Notes payable Interest payable Deferred sales revenue Common stock Retained Earnings Total Adjusted T/B Debit Credit $ 30,000 $ 40,000 $ 800 $ 60,000 $ 20,000 $ 1,333 $ 1,000 $ 1,500 $ 80,000 $ 40,000 $ 31,000 $ 1,500 $ 50,000 $ 1,500 $ 2.000 $ 60,000 $ 48,633 $ 234,633 $ 234,633 3 $ 24,133 Income Summary Retained Earnings (To close Income statement to retained earnings) $ 24,133 4 $ 4,000 Retained Earnings Dividends (To close dividends to retained earnings) $ 4,000 * Retained Earnings Beginning R.E+Net Income *Retained Earnings $28,500+24,113-4,000 *Retained Earnings- $48,633.

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