Question

3. (15 points) (Adjusting Entries and Financial Statements) The following are the trial balance and the other information related to Yorkis Perez, a consulting engineer. YORKIS PEREZ, CONSULTING ENGINEER TRIAL BALANCE DECEMBER 31, 2014 Debit Credit Cash $ 44,500 Accounts Receivable 49,600 Allowance For Doubtful Accounts $ 750 Inventory 1,960 Prepaid Insurance 1,100 Prepaid Rent 3,750 Equipment 25,000 Accumulated Depreciation Equipment 6,250 Unearned Revenue 15,000 Notes Payable 7,200 Owner's Capital 35,010 Service Revenue 103,750 Rent Expense 9,750 Salaries and Wages Expense 30,500 Utilities Expenses 1,080 Office Expense 720 $167,960 $167,960 Note: none of the below adjustments/transactions have been recorded. They are NOT reflected in the above trial balance. You'll need to add some accounts as you record the adjustments/transactions below: 1. Provided $8,000 of the services related to the unearned revenue reflected in the trial balance. Record the adjustment. 2. Services performed for clients that were not recorded by December 31, $11,000. Record the accrued revenue. 3. Bad debt expense for the year is $2,130. Record bad debt expense. 4. Insurance expired during the year $800. Record the adjustment.

Answer 1

No - Tail will win Account Titles Unearned Revenue Service Revenue Accounts Receivable Service Revenue Bad debts expenses Allowance for doubtful accounts Insurance Expenses Prepaid Insurance Depreciation expenses Accmulated Depreciation Interest expenses Interest payable Rent expenses Prepaid Rent Salaries & wages expenses Salaries & wages payable Owner's withdrawal Cash Debit Credit $ 8.000 $ 8.000 $ 11,000 $ 11,000 $ 2,130 $ 2,130 $ 800 $ 800 $ 208 $ 208 $ 216 | $ 216 $ 750 $ 750 $ 2,510 $ 2,510 $ 4,000 $ 4,000 25000/10*1/12 o 7200*9%*1/3 o os

Credit $ 2.880 Income Statement Revenue: Service Revenue Expenses: Rent expenses 10,500 Salaries & wages expenses 33,010 Bad debts expenses 2,130 Interest expenses 216 Insurance Expenses 800 Depreciation Expenses 208 Utilities expenses 1,080 | Office Expenses $ 720 Net Income $ 1,06,360 $ $ 6,458 216 7,000 2,510 7,200 35,010 $ $ Adjusted Trial Balance Account Title Debit Cash $ 40,500 Accounts receivable $ 60,600 Allowance for doubful accounts Inventory $ 1,960 Prepaid Insurance 300 Prepaid Rent $ 3,000 Equipment $ 25,000 Accmulated Depreciation Interest payable Unearned Revenue Salaries & wages payable Notes payable Owner's Capital Owner's withdrawal $ 4,000 Service Revenue Rent expenses $ 10,500 Salaries & wages expenses 33,010 Bad debts expenses 2,130 Interest expenses 216 Insurance Expenses 800 Depreciation Expenses 208 Utilities expenses $ 1,080 Office Expenses 720 $ 1,84,024 $ 18,542 $ 1,24,902 $ Balance Sheet Assets 1.22.750 Current Assets Cash | $ 40,500 Accounts receivable $ 60,600 Inventory $ 1,960 Prepaid Insurance $ 300 Prepaid Rent $ 3,000 Total Current Assets Plant ,property & Equipment | Equipment $ 25,000 48,664 | Less: Accmulated Depreciation $ -6,458 74,086 Total Assets Liabilities & Stockholder's Equity Current Liabilities Interest payable $ 216 Allowance for doubful accounts $ 2,880 Unearned Revenue $ 7,000 Salaries & wages payable $ 2,510 Notes payable $ 7.200 Total Current Liabilities Stockholder's Equity Owner's Equity $ 1,05,096 Total Stockholder's Equity Total Liabilities & Stockholer's Equity $ 1,22,750 Statement of Stockholder's Equity Opening balance of Onwer's Equity | $ 35,010 Add: Net Income 74,086 Less: Owner's withdrawal -4,000 Closing Balance $ 1,05,096 $ 74.9 $ 19,806 $ 1,05,096 $ 1,24,902 $ 1,84,024