1. Using the worksheet, prepare the adjusted trial balance of Princess Ltd. at December 31, 2020. The unadjusted balances have been entered for you. Key each adjusting entry by letter. 2. Prepare the income statement, the statement of retained earnings, and the classified balance sheet. 3. a. Compare the business's net income for December to the amount of dividends paid to the owners. Suppose this trend continues into January. What will be the effect on the business's financial position, as shown by its accounting equation? b. Will the trend make it easier or more difficult for Princess to borrow money if the business gets in a bind and needs cash? Why? c. Does either the current ratio or the cash position suggest the need for immediate borrowing? Explain. Princess Ltd. Trial Balance Worksheet December 31,2020 Requirement 2 . Prepare the monthly income statement, the statement of retained earnings, and in Be is sign for a net loss.) dep. = Accumulated depreciation.) Requirements 1. Using the worksheet, prepare the adjusted trial balance of Princess Lid at December 31,2020. The unadjusted balances have been entered for you. Key each adjusting entry by letter 2. Prepare the income statement, the statement of retained earnings, and the classified balance sheet 3. a. Compare the business's net income for December to the amount of dividends paid to the owners. Suppose this trend continues into January What will be the effect on the business's financial position, as shown by its accounting equation? b. Will the trend make it easier or more difficult for Princess to borrow money if the business gets in a bind and needs cash? Why? c. Does either the current ratio or the cash position suggest the need for immediate borrowing? Explain. ew the month-end adjustment data.) Requirements 1. Using the worksheet, prepare the adjusted trial balance of Princess Ltd. at December 31, 2020. The unadjusted balances have been entered for you. Key each adjusting entry by letter. 2. Prepare the income statement, the statement of retained earnings, and the classified balance sheet 3. a. Compare the business's net income for December to the amount of dividends paid to the owners. Suppose this trend continues into January What will be the effect on the business's financial position, as shown by its accounting equation? b. Will the trend make it easier or more difficult for Princess to borrow money if the business gets in a bind and needs cash? Why? c. Does either the current ratio or the cash position suggest the need for immediate borrowing? Explain Month-end adjustment data Adjustment data at December 31, 2020 a. Accrued service revenue at December 31,$2,500 b. Prepaid rent expired during the month. The unadjusted prepaid balance of $2,100 relates to the period December through February c. Supplies used during December, $2,700. d. Depreciation on furniture for the month. The estimated useful life of the furniture is three years. e. Accrued salary expense at December 31 for Monday, Tuesday, and Wednesday. The five-day weekly payroll of $5,500 will be paid on Friday, January 2
