2 1 (This problem is adapted from Problem 48-2, part 2, in your text.) 4 5 6 7 9 10 11 12 13 14 15 16 17 18 19 Cactus Company's annual accounting year ends on June 30. It is June 30, 2017, and all of the 2017 entries except year-end adjusting journal entries, and the entry to record dividends, have been made.. Cactus Company is a service company and has two sources of revenue: Service and Maintenance. Because there are no sales of inventory, the Income statement does not contain a line for Gross profit, but does contain a line for Total revenues (the sum of Service revenue and Maintenance revenue). Each of the remaining sheets in this file contains 3) a description of a transaction and 2) a partially completed balance sheet, income statement, and statement of retained earnings. Transactions A through H require adjusting entries on June 30, 2017; transaction I requires an entry to record dividends declared and paid. For each transaction, show how recording the necessary entry would change the financial statements. Each transaction is independent, so you can work through the file in any order you like. All changes are entered in the blue cells on the statements. Each statement has two columns. Values in the first column are selected from a drop-down menu. For a given transaction, there may be several (or even many) blue cells that do not need to be changed. 20 21 22 27 28 29 30 31 25 24 35 36 40 READY a Instructions Transa Trans b Trans C Trans Transf Trimo G Trans Trans e Xfx ASSETS Statement of Financial Position Current assets: D EFG H JK L Income Statement 10 Transaction: A service truck was purchased on July 1, 2016. The track cost $16,000 and was expected to have a useful life to the business of 8 years, and a residual value of $4,000. The business uses the straight-line 11 method of calculating depreciation Total current assets Total assets LAMUTIES AND SHAREHOLDERS' EQUITY Liabilities Current liabilities: Total revenues Operating expenses: Total operating expenses Carings from operations Earnings before income taxes Total current liabilities Total abilities Shareholders' Equity Net income Statement of Retained Earnings Beginning balance Total shareholders' equity Total liabilities and shareholders' equity Ending balance Trans Meters Astigs... CHIEL fx EFG A.K. Statement of Financial Position Income Statement ASSETS Current assets Transaction: Cash of $4,200 was collected on May 1, 2017, for services to be rendered evenly over the next year, beginning on May 1. Unearned Service Revenue was credited when the cash was received. Some of it has now been earned but not yet recorded. Total current assets Total assets LIABILITIES AND SHAREHOLDERS EQUITY Liabilities Current liabilities: Total revenues Operating expenses: Total operating expenses Earnings from operations Earnings before income taxes ANBEGREBEECKE Total current liabilities Total liabilities Shareholders' Equity Total shareholders' equity Total liabilities and shareholders' equity Net income Statement of Retained Earnings Beginning balance Ending balance TOMS A Trans F transg READY e Transaction: Cactus borrowed $24,000 on February 1, 2017, The annual interest rate is 6% The interest and loan must be repaid in full on January 31, 2018. ASSETS C Statement of Financial Position Current assets: Total current assets Total assets LIABILITIES AND SHAREHOLDERS EQUITY Liabilities Current liabilities: D EFG H Income Statement Total revenues Operating expenses: Total operating expenses Earnings from operations Earnings before income taxes ANPAARBERESFREE READ 71 a Total current liabilities Total liabilities Shareholders' Equity Net income Statement of Retained Earnings Beginning balance Total shareholders' equity Total liabilities and shareholders' equity Ending balance e Trans Transf Transg Tra FOLL xfx Statement of Financial Position ASSETS Current assets: D EFG Income Statement Transaction: The income before tax AFTER all the adjustments was $30,000. The company's federal income tax rate is 301 percent. No entry has been made yet for income tax 10 expense. 11 13 Total current assets Total assets LIABILITIES AND SHAREHOLDERS EQUITY Liabilities Current liabilities: Total revenues Operating expenses Total operating expenses Earnings from operations Earnings before income taxes HEADH A Total current liabilities Total liabilities Shareholders' Equity Net income Statement of Retained Earnings Beginning balance Total shareholders' equity Total liabilities and shareholders' equity Ending balance Tran TOMER Tran Tran DOLL C Statement of Financial Position D EFG H Income Statement Transaction: Cactus declared and paid dividends of $2,000 ASSETS Current assets: Total current assets Total assets UABILITIES AND SHAREHOLDERS EQUITY Liabilities Current liabilities: Total revenues Operating expenses: Total operating expenses Earnings from operations Earnings before income taxes Trans Net income Total current liabilities Total liabilities Shareholders' Equity Total shareholders' equity Total liabilities and shareholders' equity Statement of Retained Earnings Beginning balance Ending balance READH E e 03 Tran JK 1988