Question

Required information The following information applies to the questions displayed below.) Tunstall, Inc., a small service company, keeps its records without the help of an accountant. After much effort, an outside accountant prepared the following unadjusted trial balance as of the end of the annual accounting period on December 31: Credit Debit 47,400 12,300 620 640 16,900 $ 10,660 9,400 2,310 Account Titles Cash Accounts receivable Supplies Prepaid insurance Service trucks Accumulated depreciation Other assets Accounts payable Wages payable Income taxes payable Note payable (3 years; 10% interest due each December 31) Common stock (5,600 shares outstanding) Additional paid-in capital Retained earnings Service revenue Remaining expenses (not detailed; excludes income tax) Income tax expense Totals 12,000 1,926 17,334 5, 400 73,330 33,180 $ 121,700 $ 121,700 Data not yet recorded at December 31 included: a. The supplies count on December 31 reflected $150 in remaining supplies on hand to be used in the next year. b. Insurance expired during the current year, $640. C. Depreciation expense for the current year, $3,500. d. Wages earned by employees not yet paid on December 3, $590. e. Income tax expense, $5,380.

Answer 1

2-a

TUNSTALL, INC. Income Statement For The Year Ended December 31
Operating revenue:
Service revenue	$73,330
Operating expenses:
Supplies expense ($620-150)	470
Insurance expense	640
Depreciation expense	3,500
Wages expense	590
Remaining expense (not detailed)	33,180
Total expenses	38,380
Income before income tax	34,950
Income tax expense	5,380
Net income	$29,570
Earning per share ($29,570/5,600)	$5.28

2-b.

TUNSTALL, INC. Balance Sheet At December 31
Assets		Liabilities and stockholder's equity
Current assets:		Current liabilities:
Cash	$47,400	Accounts payable	$2,310
Accounts receivable	12,300	Wages payable	590
Supplies	150	Income tax payable	5,380
Total current assets	59,850	Total current liabilities	8,280
Service trucks	16,900	Notes payable (long term)	12,000
Less: Accumulated depreciation	-12,900	Total liabilities	20,280
Other assets	10,660	Stockholder's equity:
		Common stock	1,926
		Additional paid in capital	17,334
		Retained earnings	34,970
Total assets	$74,510	Total liabilities and stockholder's equity	$74,510
Retained earnings = $5,400+29,570 = $34,970
Accumulated depreciation = $9,400+3,500 = $12,900

Cash = $47,400-