Question

Q1 DDC Co, specialized in computer repairs, is owned by John Greenwich. prepared the following trial balance at December 31, 2016 (in S): Unadjusted Trial Balance, DDC Co. December 31, 2016 Account Name Debit Credit Cash 5,200 Accounts Receivable 16,200 Prepaid Insurance 4,000 Supplies 2,450 Land 134,750 Equipment 135,900 Accumulated Depreciation, Equipment 65,300 Accounts Payable 7,500 Unearned Fee Revenue 6,000 Capital 127,100 Withdrawals 5,000 Revenues 188,400 Salaries Expense 90,800 Total 394,300 394,300 The data needed to determine year-end adjustments are as follows: 1. Depreciation of equipment for the year, $4,000 2. Accrued salaries at December 31, $3,170 3. Unexpired insurance at December 31, $1,900 4. Fees earned but not received at December 31, $6,350 5. Supplies on hand at December 31, $675 6. Unearned Fee Revenue still unearned at December 31, $3,500 7. Interest accrued but not paid at December 31, $1,000 Required: Journalize the adjusting entries from 1 to 7. b) Post the adjusting entries to T-accounts. Prepare the adjusted trial balance. d) Prepare the Income Statement for the year ended Dec 31, 2016. Prepare the Balance Sheet as of Dec. 31, 2016.

Answer 1

B C D Α 1 a) 2 Date Particulars 1 Depreciation expense Accumulated depreciation 2 Salaries expense Salaries payable 3 Insurance expense Prepaid insurance 4 Accounts receivable Revenues 5 Supplies expense Supplies 6 Unearned fee revenue Revenues 7 Interest expense Interest payable Debit ($) Credit ($) 4000 40001 3170 3170 2100 2100 6350 10 6350 11 1775 1775 12 13 2500 14 25001 15 1000 16 10000

b) Depreciation expenese Op bal Accumulated depreciation Op bal 65300 4000 1 4000 End bal 4000 Endbal 69300 Salaries payable Op bal Salaaries expense Op bal 90800 2 3170 end bal 93970 3170 End bal 3170 Prepaid insurance Op bal 4000 Insurance expense Op bal 3 2100 End bal 2100 2100 End bal

Accoounts receivable Op bal 16200 6350 Revenues Op bal 18400 6350 2500 197250 End bal 22550 End bal Supples expense Op bal Supplies Op bal 24501 1775 1775 End bal 1775 End bal 675 Unearned fee revenue Op bal 6 25001 6000 Interest expense Op bal 1000 end bal 1000 End bal 3500

Interest payable Op bal 1000 1000 End bal

Adjustedments 6350 | 2100 1775 Unadjusted T/b 52001 16200 4000 2450 134750 135900 65300 7500 6000 4000 25001 1 c) 2 Particulars 3 Cash 4 Accounts receivable 5 Prepaid insurance 6 Supplies 7 Land 8 Equipment 9 Accumulated depreciation 10 Accounts payable 11 Unearned fee revenue 12 Interest payable 13 Salaries payable 14 Capital 15 Withdrawals 16 Revenues 17 Salaries expense 18 Insurance expense 19 Supplies expense 20 Interest expensse 21 Depreciation expense 22 Total Adjusted T/B 5200 22550 1900 675 13450 135900 69300 7500 3500 1000 31701 217100 5000 197250 939701 2100 1775 1000 1000 3170 127100 5000 188400 8850 90800 3170 2100 1775 1000 4000 20895 4000l 394300 394300 20895 408820 408820

197250 25 d) 26 Income statement 27 Revenues 28 Less: Expenses 29 Salaries expense 30 Insurance expense 31 Supplies expense 32 Interest expense 33 Depreciation expense 34 Total expenses 93970 21001 1775 1000 4000 102845 35 36 Net Inome 94405

5200 22550 1900 675 39 e) 40 Balance sheet 41 Current assets 42 Cash 43 Accounts receivable 44 Prepaid insurance 45 Supplies 46 Total current assets 47 48 Plant assets 49 Land 50 Equipment 51 Accumulated depreciation 52 Total Asssets 30325 134750 135900 -69300 66600 231675

54 Current liabilities 7500 55 Accounts payable 56 Unearned fee revenue 3500 1000 3170 15170 57 Interest payable 58 Salaries payable 59 Totaal current liabilities 60 61 Equity 62 Capital 63 Total liabilities and equity 216505 231675