Question

Just p8, questions 1-4.

Detemining Adjusting Entries and Tracing Their Effects to Financial State ments LO 3, 4 GENERAL LEDGER P8. Steven Tax Service, Inc. 's trial balance at the end of its second year of operation is as follows senEADSHEET 3: Adjutedtria balane $31,93 Steven Tax Ser vice, Inc. Trial Balance December 31, 2014 Cash 2,268 Accounts Receivable Prepaid In surance 1,031 240 Office Supplies Ofice Equpment Accumulated Depreciation-Office Equpment Accounts Payable 782 7,100 770 635 UneanedTax Fees 219 Common Stock 3,000 Retained Earnings 2,439 Dividends 6,000 Tax Fees Revenue 21,926 Office Salaries Expense 8300 Advertis ing Expen se Rent Expense Telephone Expense 650 2400 218 28,989 28,989 Comp A p d Assignments 175 The folkowing information is also available: a. Office supplics on hand, December 31, 2014, $227 b. Insurance still unexpired, $120 c. Estimated depreciation of office equipmnent, $770 d. Telephone expense for December, $19; the bill was received but not re aorded. e. The services for all uncarned tax fees had been performed by the end of the ye ar. f. stimated federal income taxes for the year, $2,160 REQUIRED 1 Open T accounts for the accounts in the trial balance plus the following: Income Taxes Payable; Office Supplics Expense; Insurance Expense; Depreciation Expense Office Equipment; and Income Taxes Expense. Recond the balances shown in the trial balanoe 2. Determine the adjusting entrics and post them directhy to the Taccounts 3. Prepare an adjusted trial balanoe, an incomne statement, a statement of Retained Earnings, and a balance sheet. 4. ACCOUNTING CONNECTION Why is it not necessary to show the effects of the above transactions on the statement of cash lows

Answer 1

Steven Tax Service Inc. Adjusting Enteries Debit in $ Credit in $ Particulars Date 31.12.2014 Supplies Expense a/c Dr. 555 To Office Supplies 555 (Supplies Expensed) 782 - 227 = 555 31.12.2014 Insurance Expense a/c Dr. 120 To Prepaid Insurance 120 (Insurance expensed) 240 120 120 31.12.2014 Depreciation office equip a/c Dr. 770 - To Accum. Depre. - Office Equip 770 (To record depreciation) 31.12.2014 Telephone expense a/c To Accounts Payable 19 Dr. 19 (Telephone expense accrued) 31.12.2014 Unearned Tax Fees a/c Dr. 219 To Tax Fees Revenue 219 (Revenue recognized) 31.12.2014 Federal Income Tax Expense a/c Dr. 2160 To federal Income tax payable 2160 (Federal Income tax accrued)

Worksheet For the period ending 31.12.2014 Adjustment Unadjusted Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in$ Debit in $ Credit in $ Adjusted Balance sheet Income Statement Particulars Cash 2268 2268 2268 Accounts Receivable 1031 1031 1031 Prepaid Insurance Office Supplies 240 120 120 120 782 555 227 227 Office Equipment 7100 7100 7100 Accum. Depre. - Office Equip Accounts Payable 1540 770 770 1540 635 19 654 654 Unearned 21 219 0 Federal Income tax payable 2160 2160 2160 Common Stock 3000 3000 3000 Retained Earnings 2439 2439 3392 Dividends 6000 6000 22145 Tax Fees Revenue 21926 219 22145 Office Salaries Expense 8300 8300 8300 Advertising Expense 650 650 650 Rent Expense 2400 2400 2400 Telephone expense 218 19 237 237 Supplies Expense 555 555 555 Insurance Expense 120 120 120 Depreciation - office equip 770 770 770 Federal Income Tax Expense 2160 2160 2160 Totals 10746 10746 28989 28989 3843 3843 31938 31938 15192 22145 Net Income 6953

Statement of Income For the period ending 31.12.2014 Tax Fees Revenue 22145 Less: Office Salaries Expense 8300 Advertising Expense 650 Rent Expense 2400 Telephone expense 237 Supplies Expense 555 Insurance Expense 120 Depreciation - office equip 770 13032 9113 Federal Income Tax Expense -2160 Net Income 6953 Statement of Owner's Equity For the period ending 31.12.2014 Beginning 2439 Net Income 6953 9392 Dividends -6000 3392

Balance sheet As at 31.12.2014 Amounts in $ Amounts in $ Liabilities Amounts in $ Amounts in $ Assets Current Assets Current Liabilities Accounts Payable Cash 2268 654 Federal Income tax payable Accounts Receivable 1031 2160 2814 Prepaid Insurance 120 Office Supplies 227 3646 Shareholders Equity Non Current Assets Office Equipment Accum. Depre. - Office Equip 7100 Common Stock 3000 5560 Retained Earnings -1540 3392 6392 Total Assets 9206 Total Liabilities & Equity 9206