1. Prepare T-accounts (representing the ledger) with balances from the unadjusted trial balance. 2. Prepare the necessary adjusting journal entries for items a through h and post them to the T-accounts. Assume that adjusting entries are made only at year-end. 3. Update balances in the T-accounts for the adjusting entries and prepare an adjusted trial balance. 4. Prepare Wells Technical Institute's income statement and statement of retained earnings for the year and prepare its balance sheet as of December 31. The Retained Earnings account balance was $80,000 on December 31 of the prior year. Check (2e) Cr. Training Revenue, $5,000 (2f) Cr. Tuition Revenue, $7,500 (3) Adj. trial balance totals, $345,700 (4) Net income, $49,600 The adjusted trial balance for Chiara Company as of December 31 follows. Problem 3-4A Preparing financial statements from the adjusted trial balance P5 1. Prepare T-accounts (representing the ledger) with balances from the unadjusted trial balance. 2. Prepare the necessary adjusting journal entries for items a through h and post them to the T-accounts. Assume that adjusting entries are made only at year-end. 3. Update balances in the T-accounts for the adjusting entries and prepare an adjusted trial balance. 4. Prepare Wells Technical Institute's income statement and statement of retained earnings for the year and prepare its balance sheet as of December 31. The Retained Earnings account balance was $80,000 on December 31 of the prior year. Check (2e) Cr. Training Revenue, $5,000 (2f) Cr. Tuition Revenue, $7,500 (3) Adj. trial balance totals, $345,700 (4) Net income, $49,600 The adjusted trial balance for Chiara Company as of December 31 follows. Problem 3-4A Preparing financial statements from the adjusted trial balance P5 statements from the adjusted trial balance P5 Use the information in the adjusted trial balance to prepare (a) the income statement for the year ended December 31;(b) the statement of retained earnings for the year ended December 31 [Note: Retained Earnings at December 31 of the prior year was $235,800]; and (c) the balance sheet as of December 31. On April 1, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company's first month. Apr. 1 Nozomi invested $30,000 cash and computer equipment worth $20,000 in the company in exchange for common stock. 2 The company rented furnished office space by paying $1,800 cash for the first month's (April) rent. 3 The company purchased $1,000 of office supplies for cash. 10 The company paid $2,400 cash for the premium on a 12-month insurance policy. Coverage begins on April 11. 14 The company paid $1,600 cash for two weeks' salaries earned by employees. 24 The company collected $8,000 cash for commissions earned. 28 The company paid $1,600 cash for two weeks' salaries earned by employees. 29 The company paid $350 cash for minor repairs to the company's computer. 30 The company paid $750 cash for this month's telephone bill. 30 The company paid $1,500 cash in dividends. Check Total assets, $600,000 Problem 3-5A Applying the accounting cycle P1 1 P2 2 P3 3 P4 P5 P6 [continued on next page] ontinued from previous page] The company's chart of accounts follows. Required 1. Use the balance column format to set up each ledger account listed in its chart of accounts. 2. Prepare journal entries to record the transactions for April and post them to the ledger accounts. The company records prepaid and unearned items in balance sheet accounts. 3. Prepare an unadjusted trial balance as of April 30. 4. Use the following information to journalize and post adjusting entries for the month: a. Prepaid insurance of $133 has expired this month. b. At the end of the month, $600 of office supplies are still available. c. This month's depreciation on the computer equipment is $500. d. Employees earned $420 of unpaid and unrecorded salaries as of month-end. e. The company earned $1,750 of commissions that are not yet billed at month-end. 5. Prepare the adjusted trial balance as of April 30. Prepare the income statement and the statement of retained earnings for the month of April and the balance sheet at April 30. 6. Prepare journal entries to close the temporary accounts and post these entries to the ledger. 7. Prepare a post-closing trial balance. Use the information in the adjusted trial balance to prepare (a) the income statement for the year ended December 31;(b) the statement of retained earnings for the year ended December 31 [Note: Retained Earnings at December 31 of the prior year was $235,800]; and (c) the balance sheet as of December 31. On April 1, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company's first month. Apr. 1 Nozomi invested $30,000 cash and computer equipment worth $20,000 in the company in exchange for common stock. 2 The company rented furnished office space by paying $1,800 cash for the first month's (April) rent. 3 The company purchased $1,000 of office supplies for cash. 10 The company paid $2,400 cash for the premium on a 12 -month insurance policy. Coverage begins on April 11. 14 The company paid $1,600 cash for two weeks' salaries earned by employees. 24 The company collected $8,000 cash for commissions earned. 28 The company paid $1,600 cash for two weeks' salaries earned by employees. 29 The company paid $350 cash for minor repairs to the company's computer. 30 The company paid $750 cash for this month's telephone bill. 30 The company paid $1,500 cash in dividends. [continued on next page] Check Total assets, $600,000 Problem 3-5A Applying the accounting cycle P1P2P3P4P5P6