Question

a) Oriole prepares adjusting entries monthly. Prepare adjusting entries for the month and April 30, 2021

b) Prepare balance sheet

c) prepare income statement

The unadjusted trial balance for Oriole at its year end, April 30, 2021, is as follows: ORIOLE Trial Balance April 30, 2021 Debit Credit Cash $12,300 Accounts receivable 9,600 Prepaid rent 4,800 Equipment 23,040 Accumulated depreciation-equipment $5,760 Accounts payable 5,700 Notes payable 10,800 Unearned revenue 1,600 T. Muzyka, capital 28,714 T. Muzyka, drawings 4,600 Service revenue 14,300 Salaries expense 9,300 Interest expense 594 Depreciation expense 2,640 $66,874 $66,874 Additional information: 1. $600 of the unearned revenue is to be recognized because the related gardening services have been provided by April 30, 2021. 2. The equipment has an estimated useful life of eight years. 3. Interest on the note payable is due on the first day of each month for the previous month's interest. The note payable has a 6% annual interest rate.

Answer 1

a.) Adjusting Entries Date Credit $ Account Titles 30-04-2021 Unearned Revenue Service revenue Debit $ 600 600 240 30-04-2021 Depreciation expense Accmulated Depreciation-equipment (23,040 / 8 ) -2,640 240 54 30-04-2021 Interest Expense Interest payable (10,800 x 6% ) - 594 54 b.) Balance Sheet Amount in $ 12,300 9,600 4,800 17,040 Cash Accounts Receivable Prepaid rent Equipment (net) (23,040 - 5,760 - 240 ) Total Assets Accounts Payable Notes Payable Interest payable Unearned service revenue (1,600 - 600 ) T. Muzyka , Capital (28,714 - 4,600 + 2,072) Total liabilities & Owner's Equity 43,740 5,700 10,800 54 1,000 26,186 43,740 c.) Income Statement Amount in $ 14,900 Service revenue ( 14,300 + 600 ) Less: Expenses Salaries Expense Interest Expense (594 +54) Depreciation expense (2,640 +240) Total Expenses Net Income ( 14,900 - 12,828) 9,300 648 2,880 12,828 2,072