Question

Thanos Merchandising Company Unadjusted Trial Balance December 13, 2019
Account	Balance
Bank	499.200
Interest Payable	480.000
Bank Loan (5 years)	1.472.000
Notes Receivable	896.000
Service Revenue	2.880.000
Cost of Service	1.536.000
Office Supplies	57.600
Accumulated Depreciation (Building)	896.000
Equipment	704.000
Marketing Expense	????
Building	1.280.000
Depreciation Expense (Building)	192.000
Interest receivable	240.000
Note payable (3 years)	800.000
Cash	89.600
Profit from sale of equipment	19.200
Account Receivable	364.800
Capital	2.464.000
Utilities Expense	614.400
Accounts Payable	448.000
Bank Loan (1 year)	160.000
Rent Expense	336.000
Prepaid Rent	160.000
Interest Expense	153.600
Accumulated Depreciation (Equipment)	576.000
Service discount	80.000
Land	2.560.000
Depreciation Expense (Equipment)	512.000
Interest Revenue	160.000
Insurance Expense	112.000
Unearned Service Revenue	224.000

Thanos Merchandising Company was established on January 1, 2019. As of December 31, 2019, the following additional information is available:

1. $5.000 of Office Supplies has been used.
2. Accrued interest revenue is $10.000.
3. $15.000 of prepaid rent has expired as of December 31, 2019.
4. As of December 31, 2017, $20.000 of the Unearned Service Revenue is earned.

Required:

1. Find the Marketing Expense for the year of 2019 (Hint: Write all the accounts to debit or credit sides while considering their nature. The total of debit and credit sides should be equal.)
2. Prepare and journalize the adjusting entries.
3. Prepare the adjusted trial balance.
4. Journalize the closing entries.
5. Prepare Income Statement and Statement of Financial Position (Balance Sheet) of Thanos Service Company in proper form.

Answer 1

Working as follows:

Thanos Merchandising Company
Unadjusted Trial Balance
13-Dec-19
Account	Balance
	Debit	Credit
Bank	$499,200
Interest Payable		$480,000
Bank Loan (5 years)		$1,472,000
Service Revenue		$2,880,000
Notes Receivable	$896,000
Accumulated Depreciation (Building)		$896,000
Cost of Service	$1,536,000
Office Supplies	$57,600
Note payable (3 years)		$800,000
Equipment	$704,000
Marketing Expense [B/F]	$192,000
Building	$1,280,000
Depreciation Expense (Building)	$192,000
Interest receivable	$240,000
Capital		$2,464,000
Cash	$89,600
Profit from sale of equipment		$19,200
Account Receivable	$364,800
Accounts Payable		$448,000
Utilities Expense	$614,400
Bank Loan (1 year)		$160,000
Accumulated Depreciation (Equipment)		$576,000
Rent Expense	$336,000
Prepaid Rent	$160,000
Interest Expense	$153,600
Interest Revenue		$160,000
Service discount	$80,000
Land	$2,560,000
Depreciation Expense (Equipment)	$512,000
Unearned Service Revenue		$224,000
Insurance Expense	$112,000
	$10,579,200	$10,579,200

____________________________________________________

1.

Prepare and journalize the adjusting entries:

Date	Account Titles	Debit	Credit
Dec. 31	Office supplies expense	$5,000
	Office supplies		$5,000
Dec. 31	Interest receivable	$10,000
	Interest revenue		$10,000
Dec. 31	Rent Expense	$15,000
	Prepaid Rent		$15,000
Dec. 31	Unearned service revenue	$20,000
	Service revenue		$20,000

_____________________________________________________________

Thanos Merchandising Company
Adjusted Trial Balance
13-Dec-19
Account	Balance
	Debit	Credit
Bank	$499,200
Interest Payable		$480,000
Bank Loan (5 years)		$1,472,000
Service Revenue [$2880000 + $20000]		$2,900,000
Notes Receivable	$896,000
Accumulated Depreciation (Building)		$896,000
Cost of Service	$1,536,000
Office Supplies [$57600 - $5000]	$52,600
Note payable (3 years)		$800,000
Equipment	$704,000
Marketing Expense	$192,000
Building	$1,280,000
Depreciation Expense (Building)	$192,000
Interest receivable [$240000 + $10000]	$250,000
Capital		$2,464,000
Cash	$89,600
Profit from sale of equipment		$19,200
Account Receivable	$364,800
Accounts Payable		$448,000
Utilities Expense	$614,400
Bank Loan (1 year)		$160,000
Accumulated Depreciation (Equipment)		$576,000
Rent Expense [$336000 + $15000]	$351,000
Prepaid Rent [$160000 - $15000]	$145,000
Interest Expense	$153,600
Interest Revenue [$160000 + $10000]		$170,000
Service discount	$80,000
Land	$2,560,000
Depreciation Expense (Equipment)	$512,000
Unearned Service Revenue [$224000 - $20000]		$204,000
Insurance Expense	$112,000
Office Supplies expense	$5,000
	$10,589,200	$10,589,200

_____________________________________________________

Prepare Income statement:

Income Statement
Service Revenue [$2880000 + $20000]		$2,900,000
Interest Revenue [$160000 + $10000]		$170,000
Profit from sale of equipment		$19,200
Less: Expenses
Service discount	$80,000
Cost of Service	$1,536,000
Marketing Expense	$153,600
Depreciation Expense (Building)	$192,000
Utilities Expense	$614,400
Rent Expense	$351,000
Interest Expense	$153,600
Depreciation Expense (Equipment)	$512,000
Insurance Expense	$112,000
Office Supplies expense	$5,000	$3,709,600
Net Loss		($620,400)