Question

Consider the unadjusted trial balance of London, Inc. at December 31, 2016, and the related month-end adjustment data a (Click the icon to view the month-end adjustment data.) Requirements 1. Using the worksheet, prepare the adjusted trial balance of London, Inc. at December 31, 2016. The unadjusted balances have been entered for you. Key each adjusting entry by letter. 2. Prepare the single-step monthly income statement, the statement of retained earnings, and the classified balance sheet. More Info - X Adjusted Trial Balance Debit Credit Account Cash Accounts receivable Prepaid rent Supplies Trial Balance Work Sheet December 31, 2016 Trial Balance Adjustments Debit Credit Debit Credit 8,600 1,000 2,100 1,800 60,000 3,000 4,000 Adjustment data at December 31, 2016: a. Accrued service revenue at December 31, $3,490. b. Prepaid rent expired during the month. The unadjusted prepaid balance of $2,100 relates to the period December 1, 2016 through February 28, 2017 c. Supplies used during December, $1,320 d. Depreciation on furniture for the month. The estimated useful life of the furniture is five years. e. Accrued salary expense at December 31 for Monday, Tuesday and Wednesday. The five-day weekly payroll of $12,000 will be paid on Friday. Furniture Accumulated depreciation, furniture Accounts payable Salary payable Common stock IIIIIIIIII: Print Done 15,000 UI 36,030 Retained earnings Dividends 3,700 Choose from any list or enter any number in the input fields and then continue to the next question.

Answer 1

Adjusting Journal Entries Debit ($) Credit ($) Date Account Titles $3,490 3. Accounts Receivable a. Service Revenue $3,490 (To record the accrued revenue) Rent Expense b. $700 6. Prepaid Rent (To record the rent expense) Supplies Expense $700 8. $1,320 9. c. Supplies (To record the supplies expense) Depreciation Expense $1,320 10 11 d. $1,000 12 13 Accumulated Depreciation, furniture $1,000 (To record the deprciation expense) Salary Expense 14 $7,200 15 e. Salary Payable $7,200 16 (To record the salary accrued) 17 18

Unadjusted Adjusted Account Titles Trial Balance Adjustments Debit ($) Trial Balance Credit ($) Credit ($) Credit ($) Debit ($) Debit ($) $8,600 $8,600 4 Cash 5 Accounts Receivable $1,000 $3,490 $4,490 a. 6 Prepaid Rent 7 Supplies 8 Furniture 9 Accumulated Depreciation, furniture 10 Accounts Payable 11 Salary Payable $700 $2,100 b. $1,400 $480 $1,800 $1,320 C. $60,000 $60,000 $3,000 d. $1,000 $4,000 $4,000 $4,000 $7,200 $7,200 e. 12 Common Stock $15,000 $36,030 $15,000 $36,030 13 Retained Earnings 14 Dividends $3,700 $3,700 15 Service Revenue $23,000 $3,490 $26,490 a. 16 Salary expense $3,300 $7,200 $10,500 e. 17 Rent b. $700 $700 expene 18 Utilities expense $530 $530 19 Depreciation expense 20 Supplies expense d. $1,000 $1,000 $1,320 $1,320 C. 21 22 Totals $81,030 $81,030 $13,710 $13,710 $92,720 $92,720 23 D. 3.

Unadjusted Adjusted 1. Account Titles Trial Balance Adjustments Trial Balance Credit ($) Debit ($) =B4 Debit ($) 8600 Debit ($) Credit ($) Credit ($) 4 Cash 5 Accounts Receivable 1000 a. 3490 =B5+E5 6 Prepaid Rent 7 Supplies 8 Furniture 2100 b. l=B6/3 =B6-G6 c. 1320 =B7-G7 =B8 1800 60000 d. =(SLN(B8,0,5)*(1/12)) 3000 Accumulated Depreciation, furniture 10 Accounts Payable 11 Salary Payable =C9+G9 4000 =C10 =G11 =C12 e. =(12000/5)*3 12 Common Stock 15000 13 Retained Earnings =C13 36030 3700 =B14 14 Dividends =C15+G15 a. 3490 15 Service Revenue 23000 16 Salary expense e. 7200 b. 700 3300 =B16+E16 17 Rent expene =E17 =B18 530 18 Utilities expense 19 Depreciation expense 20 Supplies expense d. 1000 =E19 =E20 c. [1320 21 |=SUM(G4:G21) =SUM(B4B21) =SUM(C4:C21) =SUM(E4E21) =SUM(H4H21) =SUM(14:121) 22 Totals 23

London, Inc. Income Statement Month ended December 31, 2016 4 Revenue Service Revenue $26,490 Less: Expenses Salary Expense Rent Expense Utilities Expense Depreciation Expense Supplies Expense 6 $10,500 7. $700 8. $530 $1,000 10 $1,320 11 12 13 Total Expenes $14,050 $12,440 14 Net Income 15 16 London, Inc. 17 Statement of Retained Earnings Month ended December 31, 2016 18 19 20 Retained Earnings, December 1, 2016 $36,030 $12,440 21 Add: Net Income $48,470 22 23 Less: Dividends $3,700 $44,770 24 Retained Earnings, December 31, 2016 25 2.

London, Inc. Income Statement Month ended December 31, 2016 3. 4 Revenue =I15 Service Reveue 6 Less: Expenses Salary Expense Rent Expense Utilities Expense Depreciation Expense Supplies Expense =H16 =H17 8. =H18 9. =H19 10 =H20 11 12 =SUM(L7L11) |=M5-M13 13 Total Expenes 14 Net Income 15 16 17 London, Inc. Statement of Retained Earnings Month ended December 31, 2016 18 19 20 Retained Earnings, December 1, 2016 =I13 21 Add: Net Income =M14 =M20+M21 22 =H14 23 Less: Dividends =M22-M23 24 Retained Earnings, December 31, 2016 25

R. London, Inc. Balance Sheet as on December 31, 2016 Liabilities Assets Current Liabilities 5 Current Assets $8,600 Accounts Payable $4,490 Salary Payable $1,400 $480 Total Current Liabilities 6 Cash $4,000 7 Accounts Receivable 8 Prepaid Rent 9 Supplies 10 Total Current Assets 11 Property, Plant and Equipment 12 Furniture $7,200 $11,200 Stockholder's Equity $14,970 Common Stock Retained Earnings $56,000 Total Stockholder's equity $70,970 Total Liabilities $15,000 $44,770 $60,000 13 Less: Accumulated Depreciation, furniture $4,000 $59,770 $70,970 14 Total Assets 15

R. London, Inc. Balance Sheet as on December 31, 2016 3. Liabilities Assets 4 Current Liabilities Accounts Payable Salary Payable Current Assets 6 Cash 7 Accounts Receivable 8 Prepaid Rent 9 Supplies =H4 =I10 =H5 =H6 |=I11 Total Current Liabilities =S6+S7 =H7 =SUM(Q6:Q9) Stockholder's Equity 10 Total Current Assets Common Stock Retained Earnings Total Stockholder's equity Total Liabilities 11 Property, Plant and Equipment 12 Furniture =I12 =M24 =H8 =P12-P13 =s11+S12 =S9+S13 =19 13 Less: Accumulated Depreciation, furniture 14 Total Assets =Q10+Q13 15 2.

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