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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

For each account listed, identify whether the account would appear on the post-closing trial balance. Indicate either yes or no.

18. Cash

The unadjusted trial balance of Farish Investment Advisers at December 31, 2018, follows: Adjustment data at December 31, 2018: a. Unearned Revenue earned during the year, \(800. b. Office Supplies on hand, \)4,500. c. Depreciation for the year, \(4,500. d. Accrued Salaries Expense, \)5,000. e. Accrued Service Revenue, \(6,500. Requirements 1. Prepare a worksheet for Farish Investment Advisers at December 31, 2018. 2. Prepare the income statement, the statement of retained earnings, and the classified balance sheet in account format. 3. Prepare closing entries. Account Title Office Supplies Cash Debit Credit Accounts Receivable Equipment Accumulated Depreciation鈥擡quipment Accounts Payable Salaries Payable Unearned Revenue Common Stock Notes Payable (long-term) Dividends Service Revenue Insurance Expense Salaries Expense Supplies Expense Interest Expense Rent Expense Balance \) 30,000 \( 198,000 \) 198,000 5,500 $ 9,000 13,000 27,000 21,000 93,000 Retained Earnings 29,500 29,000 2,500 40,000 5,500 5,000 51,000 7,000 28,000 Depreciation Expense鈥擡quipment Total FARISH INVESTMENT ADVISERS Unadjusted Trial Balance December 31, 2018

If a business had a net loss for the year, what would be the closing entry to close Income Summary and transfer the net loss to the Retained Earnings account?

For each account listed, identify whether the account is a temporary account (T) or a permanent account (P). a. Rent Expense b. Prepaid Rent c. Equipment d. Common Stock e. Salaries Payable f. Dividends g. Service Revenue h. Supplies Expense i. Office Supplies.

On December 1, Curt Wilson began an auto repair shop, Wilson鈥檚 Quality Automotive. The following transactions occurred during December: Dec. 1 Wilson contributed \(63,000 cash to the business in exchange for shares of common stock. 1 Purchased \)14,400 of equipment paying cash. 1 Paid \(3,600 for a twelve-month insurance policy starting on December 1. 9 Paid \)15,000 cash to purchase land to be used in operations. 10 Purchased office supplies on account, \(2,200. 19 Borrowed \)24,000 from the bank for business use. Wilson signed a notes payable to the bank in the name of the corporation. The note is due in five years. 22 Paid \(2,000 for advertising expenses. 26 Paid \)1,000 on account. 28 The business received a bill for utilities to be paid in January, \(260. 31 Revenues earned during the month included \)18,500 cash and \(3,800 on account. 31 Paid employees鈥� salaries \)3,900 and building rent \(800. Record as a compound entry. 31 The business received \)1,380 for auto screening services to be performed next month. 31 Paid cash dividends of \(5,000 to stockholders. The business uses the following accounts: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Land; Equipment; Accumulated Depreciation鈥擡quipment; Accounts Payable; Utilities Payable; Interest Payable; Unearned Revenue; Notes Payable; Common Stock; Retained Earnings; Dividends; Income Summary; Service Revenue; Salaries Expense; Rent Expense; Utilities Expense; Advertising Expense; Supplies Expense; Insurance Expense; Interest Expense; and Depreciation Expense鈥擡quipment. Adjustment data: a. Office Supplies used during the month, \)600. b. Depreciation for the month, \(240. c. One month insurance has expired. d. Accrued Interest Expense, \)120. 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.

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