(L.OBJ. 1, 2, 3, 4, 5, 6) Completing the accounting cycle [120-150 min] The trial balan...

(L.OBJ. 1, 2, 3, 4, 5, 6) Completing the accounting cycle [120-150 min]

The trial balance of Racer Internet at May 31, 2011, follows:

Adjusting data at May 31:

a. Unearned service revenue still unearned at My 31, $700

b. Prepaid rent still in force at May 31, $1,600

c. Supplies used during the month, $900

d. Depreciation for the month, $600

e. Accrued salary expense at May 31, $800

Requirements

1. Journalize adjusting journal entries.

2. Enter the trial balance on a work sheet and complete the work sheet for Racer Internet.

3. Prepare the income statement, statement of owner’s equity, and classified balance sheet in report form.

4. Using the work sheet data that you prepared, journalize the closing entries and post the adjusting and closing entries to T-accounts. Use dates and show the ending balance of each account.

5. Prepare a Post closing trial balance.

6. Calculate the current and debt ratios for the Company.