Prepare annual adjusting entries (from 8 points below), income statement for 201
ID: 2346914 • Letter: P
Question
Prepare annual adjusting entries (from 8 points below), income statement for 2010, a statement of owner's equity, and a classified balance sheet with supporting info. given:Yorkis Perez, Consulting Engineer
Trial Balance
December 31, 2010
Cash $29,500
Accounts Receivable 49,600
Allowance for Doubtful Accounts $750
Engineering Supplies Inventory 1,960
Prepaid Insurance 1,100
Furniture and Equipment 25,000
Accumulated Depreciation- Furniture and Equipment 6,250
Notes Payable 7,200
Yorkis Perez, Capital 35,010
Service Revenue 100,000
Rent Expense 9,750
Office Salaries Expense 30,500
Heat, Light, and Water Expense 1,080
Misc. Office Expense 720
$149,210 $149,210
1. Fees received in advance from clients $6,000.
2. Services performed for clients that weren't recorded by 12/31 $4,900.
3. Bad debt expense for year $1,430.
4. Insurance expired during year $480.
5. Furniture and equipment is being depreciated at 10% during year.
6. Yorkis Perez gave bank 90-day, 10% note for $7,200 on 12/1/10.
7. Rent of building is $750 per month. Rent for 2010 has been paid, as has that for 1/11.
8. Office salaries earned but unpaid 12/31/10 $2,510.
Also, Yorkis Perez withdrew $17,000 cash for personal use during year.
Explanation / Answer
Service revenue ($100,000 – $6,000 + $4,900)=$98,900 Expenses Office salaries expense ($30,500 + $2,510) =$33,010 Rent expense ($9,750 – $750) = 9,000 Depreciation expense = 2,500 Bad debt expense = 1,430 Heat, light, and water expense = 1,080 Miscellaneous office expense = 720 Insurance expense = 480 Interest expense = 60 Total expenses = 48,280 Net income = $50,620 Yorkis Perez, Capital, January 1 = $ 52,010a Add: Net income = 50,620 Less: Withdrawals = (17,000) Yorkis Perez, Capital, December 31 = $ 85,630 (a)Yorkis Perez, Capital—trial balance = $35,010 Withdrawals during the year = 17,000 Yorkis Perez, Capital, as of January 1, 2010 = $52,010 Assets Current assets Cash $29,500 Accounts receivable ($49,600 + $4,900)= $54,500 Less: Allowance for doubtful accounts (2,180)*52,320 Engineering supplies inventory 1,960 Prepaid insurance ($1,100 – $480) =620 Prepaid rent 750 Total current assets $ 85,150 Furniture and equipment 25,000 Less: Accum. depreciation (8,750)*16,250 Total assets $101,400 Liabilities and Owner’s Equity Current liabilities Notes payable $7,200 Unearned service revenue 6,000 Salaries payable 2,510 Interest payable 60 $ 15,770 Yorkis Perez, Capital ($35,010 + $50,620) = 85,630 Total liabilities and owner’s equity $101,400