Question

Cash Accounts receivable Prepaid insurance Supplies inventory Trial balance Financial Statements Statement of Income Balance Sheet Statement of Cash Flows Trial balance Debits Credits Adjusting entries Debits Credits Adjusted trial balance Debits _ Credits _ Revenue Assets Cash Accounts receivable Prepaid insurance Supplies inventory Computer equipment Accumulated depreciation Total assets Net income + Depreciation - Accounts receivable - Prepaid insurance - Supplies + Accounts payable Cash from operations Computer equipment Accounts payable Notes payable Common stock Accounts Cash Accounts receivable Prepaid insurance Supplies inventory Computer equipment Accumulated depreciation Accounts payable Notes payable Common stock Revenue Cleaning expense Depreciation expense Insurance expense Interest expense Rent expense Salaries expense Supplies expense Utilities expense Expenses Cleaning expense Depreciation expense Insurance expense Interest expense Rent expense Salaries expense Supplies expense Utilities expense Total expenses Equipment Cash from investing Liabilities Accounts payable Notes payable Total liabilities Stock Notes payable Cash from financing TITI Revenue Cleaning expense Rent expense Salaries expense Net income (loss) Stockholders' Equity Common stock Retained earings Total stockholders' equity Beginning balance Cash flows Statement of Stockholders' Equity .S .S - $ Total liabilities & equity Prepare the adjusted trial balance by making the the following adjustments (use AP for all payables): 1. Recognize one month of insurance expense, interest expense, and depreciation on equipment (5-year asset) Beginning balance Common stock Net income (loss) Retained earnings Dividends Ending balance 2. Accrue for salaries expense and utilities expense of $695 and $286, respectively 3. Supplies on hand were $1,305 cord the following journal entries and post to the T-accounts for ABC Company for the month of January 1. On 1/1, Common stock was issued for $50,000. 2. On 1/3, ABC signed a 6% note (.5% per month) at State Bank for $75,000. 3. On 1/4, ABC purchased computer equipment for $81,500. 4. On 1/6, ABC purchased office supplies on account for $2,850. 5. On 1/7, ABC purchased prepaid insurance for $4,800 and paid rent of $1,800. 6. On 1/10, ABC paid salaries of $950. 7. On 1/15, ABC provided computer consulting services for a client and received $ 3,450 in cash. 8. On 1/20, ABC provided computer consulting services for a client that promised to pay $3,150 in 30 days. 9. On 1/21, ABC paid for half of the office supplies purchased on 1/6. 10. On 1/24, ABC paid salaries of $1,235. 11. On 1/26, ABC collected a partial payment of $1,100 from the client from 1/20. 12. On 1/29, ABC paid for $75 cleaning services.

Answer 1

ABC Company Journal Enteries Date Particulars Jan-01 Cash a/c Dr. To Common Stock (Common Stock issued) Debit in $ Credit in $ 50000 50000 Jan-03 75000 Cash a/c Dr. To Note Payable (Signed Note Payable) 75000 81500 Jan-04 Computer Equipment a/c Dr. To Cash (Computer Equipment purchased) 81500 Jan-06 2850 Office Supplies a/c Dr. To Accounts Payable (Supplies on account) 2850 Dr. Dr. 4800 1800 Jan-07 Prepaid Insurance a/c Rent Expense a/c To Cash (Expense paid) 6600 Jan-10 Dr. 950 Salaries Expense a/c To Cash (Salaries paid) 950 Jan-15 Dr. 3450 Cash a/c To Computer Consulting serivces (Services provided for cash) 3450 Jan-20 3150 Accounts Receivable a/c Dr. To Computer Consulting serivces (Services provided on account) 3150 1425 Jan-21 Accounts Payable a/c Dr. To Cash (Creditors paid) 2850 / 2 = 1425 1425 Dr. 1235 Jan-24 Salaries Expense a/c To Cash (Salaries paid) 1235 Jan-26 1100 Cash a/c Dr. To Accounts Receivable (Cash from debtors) 1100 Jan-29 Cleaning Expense a/c Dr. To Cash (Cash paid for cleaning services) 75

Adjusting Enteries Date Particulars Jan-31 Insurance Expense a/c Dr. To Prepaid Insurance (Insurance expensed) 4800/12 Debit in $ Credit in $ 400 400 375 Jan-31 Interest Expense a/c Dr. To Interest Payable (Interest accrued) 75000 x 6% x 1/12 375 1358 Jan-31 Depreciation Expense a/c Dr. To Accum Depre - Comp. Equip. (To record depreciation) 81500/(5 x 12) 1358 Dr. 695 Jan-31 Salaries Expense a/c To Salary Payable (Salary accrued) 695 Dr. 286 Utilities Expense a/c To Accounts Payable (Expenses accrued) 286 1545 Jan-31 Supplies Expense a/c Dr. To Supplies (Supplies expensed) 2850 - 1305 = 1545 1545

Worksheet For the month ending Jan 31 Unadjusted Adjustments Adjusted Particulars Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ Cash 37765 37765 Accounts Receivable 2050 2050 Prepaid Insurance 4800 400 4400 Office Supplies 2850 1545 1305 Computer Equipment 81500 81500 Accum Depre - Comp. Equip. 1358 1358 Accounts Payable 1425 286 1711 Interest Payable 375 375 Salary Payable 695 695 Note Payable 75000 75000 Common Stock 50000 50000 Computer Consulting serivces 6600 6600 Cleaning Expense 75 75 Depreciation Expense 1358 1358 Insurance Expense 400 400 Interest Expense 375 375 Rent Expense 1800 1800 Salaries Expense 2185 695 2880 Supplies Expense 1545 1545 Utilities Expense 286 286 Totals 133025 133025 4659 4 659 135739 135739 6600 75 Statement of Income For the month ending Jan 31 Computer Consulting serivces Less: Cleaning Expense Depreciation Expense Insurance Expense Interest Expense Rent Expense Salaries Expense Supplies Expense Utilities Expense Net Loss 1358 400 375 1800 2880 1545 286 8719 -2119 Statement of Stockholders Equity For the month ending Jan 31 Common Retained Stock Earnings Beginning Balance Add: Capital 50000 50000 Less:Net Loss -2119 Ending Balance 50000 -2119 0 Totals 0 50000 50000 -2119 47881 0

Balance sheet As at Jan 31 Assets Current Assets Cash Accounts Receivable Prepaid Insurance Office Supplies Amounts in $ Amounts in $ Liabilities Amounts in $ Amounts in $ Current Liabilities 37765 Accounts Payable 1711 2050 Interest Payable 375 4400 Salary Payable 695 2781 1305 45520 Non Current Liabilities Note Payable 75000 81500 -1358 80142 Shareholders Equity Common Stock 50000 Retained Earnings -2119 47881 125662 Total Liabilities & Equity 125662 Non Current Assets Computer Equipment Accum Depre-Comp. Equip. Total Assets -2119 Statement of Cashflow For the month ending Jan 31 Cashflow from Operating Activity Net Loss Adjustments: Depreciation Expense Increase in Accounts Receivable Increase in Prepaid Insurance Increase in Office Supplies Increase in Accounts Payable Increase in Interest Payable Increase in Salary Payable Cash used for Operating Activity 1358 -2050 -4400 -1305 1711 375 695 -3616 -5735 Cashflow from Investing Activity Equipment purchased Cash used for Investing Activity -81500 -81500 50000 75000 Cashflow from Financing Activity Common Stock issued Note Payable issued Cash generated from Financing activity Net Increase in Cash Beginning Cash Balance Ending Cash Balance 125000 37765 37765