Question

Prepaid Insurance 1,000 89,020 Accounts Receivable 103,100 103 100 Equipment 100,000 Allowance for Doubtful Accounts 1,500 1.500 Accumulated Depreciation Equipment 10.000 3,920 3920 Unearned Service Revenue Interest Payable 10,000 100,000 Notes Payable Salaries and Wages Payable Common Stock Service Revenue Bad Debt Expense 82,200 15,000 35,000 196,500 196,500 Insurance Expense Depreciation Expense Salaries and Wages Expense 22,800 22,800 Utilities Expense Office Expense 27,510 27.510 1,770

Required: 1. Prepare the adjusting entries on the Trial Balance tab, and complete the worksheet on the Trial Balance tab

2. On the Financial Statements tab, prepare the income Statement, Retained Earnings Statement, and Balance Sheet for the 2020 year

3. On the Tab complete T-Accounts for all accounts. The ending balances in every should agree to the balances on the Balance Sheet as of December 31, 2020

Answer 1

Company Adjusting Enteries Trans. Particulars Service Revenue a/c Dr. To Unearned Service Revenue (Correction entry) Debit in $ Credit in $ 10000 10000 b. 2500 Accounts Receivable a/c Dr. To Service Revenue (Services provided on account) 2500 15000 Bad Debts Expense a/c Dr. To Allowance for Doubtful accounts (Bad debts accounted) 15000 d. Dr. 500 Insurance Expense a/c To Prepaid Insurance (Insurance expensed) 500 e. 20000 Depreciation Expense a/c Dr. To Accum. Depre - Equip. (To record depreciation) 100000 x 20% 20000 f. 343 Interest Expense a/c Dr. To Interest Payable (Interest accrued) 82200 x 5% x 1/12 343 3400 Salaries and Wages Expense a/c Dr. To Salaries and Wages Payable (Expense accrued) 3400 h. Dr. 25000 Dividend a/c To Dividend Payable (Dividend declared) 25000

Worksheet For the period ending 31.12.2020 1500 Particulars Cash Accounts Receivable Allowance for Doubtful accounts Supplies Prepaid Insurance Equipment Accum. Depre-Equip. Unearned Service Revenue Interest Payable Salaries and Wages Payable Dividend Payable Note Payable Common Stock Retained Earnings Dividends Service Revenue Bad Debts Expense Insurance Expense Depreciation Expense Interest Expense Rent Expense Salaries and Wages Expense Utilities Expense Office Expense Totals Net Income Totals Unadjusted Adjustments Adjusted Income Statement Balance sheet Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 89020 89020 89020 103100 2500 105600 105600 15000 16500 16500 3920 3920 3920 1000 500 500 500 100000 100000 100000 10000 20000 30000 30000 10000 10000 10000 343 343 342.5 3400 3400 3400 25000 25000 25000 82200 82200 82200 15000 15000 15000 27510 27510 27510 25000 25000 196500 10000 2500 189000 189000 15000 15000 15000 500 500 500 20000 20000 20000 343 343 343 10000 10000 10000 22800 3400 26200 26200 1100 1100 1100 1770 1770 1770 332710 332710 76743 76743 398953 398953 74913 189000 299040 209953 0 114088 89088 189000 189000 299040 299040

189000 Statement of Income For the period ending 31.12.2020 Service Revenue Less: Bad Debts Expense Insurance Expense Depreciation Expense Interest Expense Rent Expense Salaries and Wages Expense Utilities Expense Office Expense Net Income 15000 500 20000 343 10000 26200 1100 1770 74913 114088 Statement of Retained Earnings For the period ending 31.12.2020 Beginning Balance Net Income 27510 114088 141598 -25000 116598 Dividends

Amounts in $ Amounts in $ 10000 343 3400 25000 38743 Balance sheet As at 31.12.2020 Assets Amounts in $ Amounts in $ Liabilities Current Assets Current Liabilities Cash 89020 Unearned Service Revenue Accounts Receivable 105600 Interest Payable Allowance for Doubtfu -16500 Salaries and Wages Payable Supplies 3920 Dividend Payable Prepaid Insurance 500 182540 Non Current Liabilities Non Current Assets Note Payable Equipment 100000 Accum. Depre - Equip -30000 70000 Shareholders Equity Common Stock Retained Earnings Total Assets 252540 Total Liabilities & Equity 82200 15000 116598 131598 252540