Question

A ting Entries and Financial Statements enthe 00 DH Credit 15.900 Aconents Roodtratie 9.500 625.000 Prepaid Fyn A $ 11,000 Derecelent) 1900 AP Unsere Rene N oyable du 31313 279,500 90800 W Rundt 1/1 Service Revere apers Rent Faper Interest Expense 13700 29.003 5169.00 $12.89.100 At yatand, you have the following data for adjustmas a. An analysis cates that prepaid reut on December 3L should be 52.100. b. A physical inventory i s the 5650 of ole suglies is onland Depreciation for 2014 is 535,250) An analysis indicates that I nevence could he $3.120 Wages in the amount of $1,450 bur tupaid and unrecorded at yourend Six months interest on the oth was de Serbe s t for the from October 1 to December 31 is unpuid and recorded Income tax of 35. 59 is but e d and rid Required: Prepare the adscing entries 2 Prepare a statement of S anto med sand a statement cial position d e balans 1 CONCEPTUAL CONNECTION I would not wel 10 senare fionncial enter the same made incit

Answer 1

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Rangoon Corporation
First we will make adjustment entries. Then we will prepare adjusted trial balance. Then we will prepare financial statements.
Workings for adjustment entries	Amount $
Prepaid Rent- Opening	9,500.00
Less: Prepaid Rent- closing	2,300.00
Rent Expense	7,200.00
Office Supplies- Opening	4,200.00
Less: Office Supplies- closing	650.00
Office Supplies Expense	3,550.00
Unearned revenue- Opening	11,200.00
Less: Unearned revenue- closing	3,120.00
Service Revenue earned	8,080.00
Notes payable	50,000.00
Interest rate	8%
Annual Interest	4,000.00
Interest payable for 3 months	1,000.00

Adjusting Entries
Account	Debit $	Debit $
Rent Expense	7,200.00
Prepaid Rent		7,200.00
Office Supplies Expense	3,550.00
Office Supplies		3,550.00
Depreciation Expense- Equipment	35,250.00
Accumulated Depreciation- Equipment		35,250.00
Unearned revenue	8,080.00
Service Revenue		8,080.00
Wages Expense	1,450.00
Wages Payable		1,450.00
Interest Expense	1,000.00
Interest payable		1,000.00
Income Tax Expense	55,539.00
Income Tax payable		55,539.00

Adjusted Trial Balance
	Unadjusted	Adjustments	Adjusted
Account Titles	Debit	Credit	Debit	Credit	Debit	Credit
Cash	3,100.00				3,100.00
Accounts Receivable	15,900.00				15,900.00
Office Supplies	4,200.00			3,550.00	650.00
Prepaid Rent	9,500.00			7,200.00	2,300.00
Equipment	625,000.00				625,000.00
Accumulated Depreciation- Equipment		104,000.00		35,250.00		139,250.00
Other Assets	60,900.00				60,900.00
Accounts Payable		9,400.00				9,400.00
Unearned Service revenue		11,200.00	8,080.00			3,120.00
Notes Payable		50,000.00				50,000.00
Wages Payable				1,450.00		1,450.00
Interest Payable				1,000.00		1,000.00
Income Tax payable				55,539.00		55,539.00
Common Stock		279,500.00				279,500.00
Retained Earnings		37,000.00				37,000.00
Service revenue		598,000.00		8,080.00		606,080.00
Wages Expense	137,000.00		1,450.00		138,450.00
Rent Expense	229,000.00		7,200.00		236,200.00
Interest Expense	4,500.00		1,000.00		5,500.00
Supplies Expense			3,550.00		3,550.00
Depreciation-Equipment			35,250.00		35,250.00
Income Tax Expense			55,539.00		55,539.00
Total	1,089,100.00	1,089,100.00	112,069.00	112,069.00	1,182,339.00	1,182,339.00

Income Statement	Amount $
Service Revenue	606,080.00
Total Revenue	606,080.00
Less: Operating Expenses
Wages Expense	138,450.00
Rent Expense	236,200.00
Interest Expense	5,500.00
Supplies Expense	3,550.00
Depreciation-Equipment	35,250.00
Total Operating Expenses	418,950.00
Income before tax	187,130.00
Less: Income Tax Expense	55,539.00
Net Income	131,591.00
Statement of Retained Earnings
Retained Earnings- Opening	37,000.00
Add: Net Income	131,591.00
Less: Dividends Paid	-
Retained Earnings- Closing	168,591.00
Statement of Financial Position	Amount $
Cash	3,100.00
Accounts Receivable	15,900.00
Office Supplies	650.00
Prepaid Rent	2,300.00
Equipment	625,000.00
Accumulated Depreciation- Equipment	(139,250.00)
Other Assets	60,900.00
Total Assets	568,600.00
Liabilities
Accounts Payable	9,400.00
Unearned Service revenue	3,120.00
Wages Payable	1,450.00
Interest Payable	1,000.00
Income Tax payable	55,539.00
Current Liabilities	70,509.00
Notes Payable	50,000.00
Non Current Liabilities	50,000.00
Total Liabilities	120,509.00
Common Stock	279,500.00
Retained Earnings	168,591.00
Total Equity	448,091.00
Total Liabilities & Equity	568,600.00