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Chapter 4: Q16E (page 221)

The adjusted trial balance for Green Advertising Services is presented below: Account Title Office Supplies Cash Debit Credit Accounts Receivable Building Accumulated Depreciation鈥擝uilding Furniture Accumulated Depreciation鈥擣urniture Land Salaries Payable Accounts Payable Unearned Revenue Common Stock Retained Earnings Dividends Service Revenue Salaries Expense Supplies Expense Depreciation Expense鈥擝uilding Balance \( 14,000 \) 195,200 \( 195,200 18,400 14,100 \) 36,100 19,600 7,200 10,600 30,000 31,400 16,000 18,300 49,800 8,400 28,600 2,900 1,300 13,500 15,800 6,500 47,900 Depreciation Expense鈥擣urniture Advertising Expense Total GREEN ADVERTISING SERVICES Adjusted Trial Balance December 31, 2018 Requirements 1. Prepare the income statement for the year ending December 31, 2018. 2. Prepare the statement of retained earnings for the year ending December 31, 2018. 3. Prepare the classified balance sheet as of December 31, 2018. Use the report form

Short Answer

Expert verified

(1) Net loss is $4,900.

(2) Ending balance of retained earnings equals $8,200

(3) Total assets and total liabilities & Stockholders鈥� equity equals $72,000.

Step by step solution

01

Income Statement

Income statement is shown as follows:

GREEN ADVERTISING SERVICES

Income Statement

Year Ended December 31, 2018

Revenues

Service Revenue

$49,800

Expenses

Salaries Expense

$28,600

Supplies Expense

8,400

Depreciation Expense鈥擝uilding

2,900

Depreciation Expense鈥擣urniture

1,300

Advertising Expense

13,500

Total Expenses

54,700

Net Loss

$(4,900)

02

Statement of Retained Earnings

Statement of retained earnings is shown as follows:

GREEN ADVERTISING SERVICES

Statement of Retained Earnings

Year Ended December 31, 2018

Retained Earnings, January 1, 2018

$31,400

Net loss for the year

(4,900_

26,500

Dividends

(18,300)

Retained Earnings, December 31, 2018

$8,200

03

Classified Balance Sheet

Balance Sheet is shown as follows:

GREEN ADVERTISING SERVICES

Balance Sheet

December 31, 2018

Assets

Current Assets:

Cash

$14,000

Office Supplies

6,500

Accounts Receivable

15,800

Total Current Assets

$36,300

Property, Plant, and Equipment:

Land

18,400

Building

47,900

Less: Accumulated Depreciation- Building

(36,100)

11,800

Furniture

19,600

Less: Accumulated Depreciation- Building

(14,100)

5,500

Total Property, Plant, and Equipment:

35,700

Total Assets

$72,000

Liabilities

Current Liabilities:

Accounts Payable

$10,600

Salaries Payable

7,200

Unearned Revenue

16,000

Total Current Liabilities:

$33,800

Total Liabilities

$33,800

Stockholders鈥� Equity

Common Stock

30,000

Retained Earnings

8,200

Total Stockholders鈥� Equity

38,200

Total Liabilities and Stockholders鈥� Equity

$72,000

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Most popular questions from this chapter

The adjusted trial balance of Rocket Real Estate Appraisal at June 30, 2018, follows: ROCKET REAL ESTATE APPRAISAL Adjusted Trial Balance June 30, 2018Account Title Office Supplies Cash Debit Credit Accounts Receivable Prepaid Insurance Building Accumulated Depreciation鈥擝uilding Land Accounts Payable Interest Payable Salaries Payable Unearned Revenue Notes Payable (long-term) Common Stock Dividends Retained Earnings Service Revenue Insurance Expense Salaries Expense Supplies Expense Interest Expense Balance \( 5,000 \) 178,100 \( 178,100 12,800 \) 25,200 71,000 8,000 1,000 2,100 37,000 25,800 5,500 1,600 1,700 18,700 5,000 33,000 48,100 4,100 32,000 600 8,000 2,900 7,100 Utilities Expense Depreciation Expense鈥擝uilding Total . Requirements 1. Prepare the company鈥檚 income statement for the year ended June 30, 2018. 2. Prepare the company鈥檚 statement of retained earnings for the year ended June 30, 2018. 3. Prepare the company鈥檚 classified balance sheet in report form at June 30, 2018. 4. Journalize the closing entries. 5. Open the T-accounts using the balances from the adjusted trial balance, and post the closing entries to the T-accounts. 6. Prepare the company鈥檚 post-closing trial balance at June 30, 2018.

For each account listed, identify whether the account would appear in either the income statement section or the balance sheet section of the worksheet. Assuming normal balances, identify if the account would be recorded in the debit (DR) or credit (CR)

column.

9. Accounts Payable

On December 1, Bob Waldo began an auto repair shop, Waldo鈥檚 Quality Automotive. The following transactions occurred during December: Dec. 1 Waldo contributed \(70,000 cash to the business in exchange for shares of common stock. 1 Purchased \)12,000 of equipment paying cash. 1 Paid \(1,750 for a five-month insurance policy starting on December 1. 9 Paid \)20,000 cash to purchase land to be used in operations. 10 Purchased office supplies on account, \(2,800. 19 Borrowed \)15,000 from the bank for business use. Waldo signed a note payable to the bank in the name of the corporation. The note is due in five years. 22 Paid \(1,300 for advertising expenses. 26 Paid \)900 on account. 28 The business received a bill for utilities to be paid in January, \(280. 31 Revenues earned during the month included \)16,000 cash and \(3,600 on account. 31 Paid employees鈥� salaries \)3,800 and building rent \(1,200. Record as a compound entry. 31 The business received \)1,440 for auto screening services to be performed next month. 31 Paid cash dividends of \(5,500 to stockholders. The business uses the following accounts: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Land; Equipment; Accumulated Depreciation鈥擡quipment; Accounts Payable; Utilities Payable; Interest Payable; Unearned Revenue; Notes Payable; Common Stock; Retained Earnings; Dividends; Income Summary; Service Revenue; Salaries Expense; Rent Expense; Utilities Expense; Advertising Expense; Supplies Expense; Insurance Expense; Interest Expense; and Depreciation Expense鈥擡quipment. Adjustment data: a. Office Supplies used during the month, \)1,800. b. Depreciation for the month, \(200. c. One month insurance has expired. d. Accrued Interest Expense, \)75. Requirements 1. Prepare the journal entries, and post to the T-accounts. 2. Prepare an unadjusted trial balance. 3. Complete the worksheet for the month ended December 31, 2018 (optional). 4. Prepare the adjusting entries, and post to the T-accounts. 5. Prepare an adjusted trial balance.6. Prepare the income statement, the statement of retained earnings, and the classified balance sheet in report form. 7. Prepare the closing entries, and post to the T-accounts. 8. Prepare a post-closing trial balance.

Refer to the data in Short Exercise S4-1. Prepare Dalton鈥檚 classified balance sheet at December 31, 2018. Assume the Notes Payable is due on December 1, 2025. Use the report form.

The unadjusted trial balance of Walton Anvils at December 31, 2018, and the data for the adjustments follow: WALTON ANVILS Unadjusted Trial Balance December 31, 2018 Account Title Prepaid Rent Cash Debit Credit Accounts Receivable Office Supplies Equipment Accumulated Depreciation鈥擡quipment Accounts Payable Salaries Payable Unearned Revenue Common Stock Dividends Retained Earnings Service Revenue Salaries Expense Rent Expense Depreciation Expense鈥擡quipment Supplies Expense Balance \( 13,480 \) 62,100 \( 62,100 7,100 \) 1,000 23,000 6,000 4,600 24,000 4,500 19,500 2,500 14,500 2,320 1,700 Total Adjustment data: a. Unearned Revenue still unearned at December 31, \(1,800. b. Prepaid Rent still in force at December 31, \)2,100. c. Office Supplies used, \(1,500. d. Depreciation, \)390. e. Accrued Salaries Expense at December 31, $200. Requirements 1. Open the T-accounts using the balances in the unadjusted trial balance. 2. Complete the worksheet for the year ended December 31, 2018 (optional). 3. Prepare the adjusting entries, and post to the accounts. 4. Prepare an adjusted trial balance. 5. Prepare the income statement, the statement of retained earnings, and the classified balance sheet in report form. 6. Prepare the closing entries, and post to the accounts. 7. Prepare a post-closing trial balance. 8. Calculate the current ratio for the company
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