Mint Cleaning Inc. prepared the following unadjusted trial balance at the end of

Question

Mint Cleaning Inc. prepared the following unadjusted trial balance at the end of its second year of operations ending December 31. (Assume amounts are reported in thousands of dollars.) Account Titles Cash Accounts Receivable Prepaid Insurance Equipment Accumulated Depreciation Accounts Payable Common Stock Retained EarningS Sales Revenue Insurance Expense Salaries and Wages Expense Supplies Expense Debit Credit s 47 98 94 10 19 Totals $212 $212 Other data not yet recorded at December 31: a. Insurance expired during the year, $2 b. Depreciation expense for the year, $1 c. Salaries and wages payable, $4 d. Income tax expense, $6

Explanation / Answer

Mint Cleaning Inc Balance Sheet At December 31 in thousand of dollars Assets Amount Liabilities Amount Journal Entries Current Assets Current liabilities Insurance Exp $2 Cash $47 Accounts Payable $9 To Prepaid Insurance $2 Calculation of Net Income Acc Receivable $9 Salaries and Wages Payables $4 Depreciation Exp $1 Sales Revenue $99 Prepaid Insurance $2 Income Tax Payable $6 To Acc Dep equipment $1 Less Operating Exp ($4-$2) Salaries and Wages Exp $4 Insurance Exp $2 Non Current Assets Equity To Salaries and wages Payable $4 Salaries and wages Exp $19 Equipment $98 Common Stock $94 Income Tax Exp $6 Supplies Exp $39 Less Acc Depre ($1) Retained Earnings $10 To Income Tax Payable $6 Depreciation Exp $1 Add Net Income $32 Income Tax Exp $6 $67 $155 $155 Net Income $32

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