AC313 Unit 1 Assignment - Accrual Accounting (1) - Excel View Formulas Review Help Data Home Insert Page Layout X fo D E F B ac Company records all of their transactions on a cash basis. Below you will see there ations of Zodiac Company for the year ended 12/31/19. Zodiac Company Income Statement For the Year Ended December 31, 2019 $ 252,000 g & Admin Expenses aries Expense $78,000 nt Expense $ 45,000 mmission Expense $ 37,800 uipment $ 30,000 lities Expense $ 29,000 urance Expense $ 6,000 erest Expense $ 3,000 $228,800 ncome $ 23,200 he company has been asked by the bank to submit financial statements in the accrual ethod of accounting. Use the income statement and the information provided below ake the adjustments necessary to change the income statement from the cash basis e accrual basis of accounting. equired: Prepare the journal entries that are necessary Complete the revised Income Statement in accrual basis accounting. Sheet1 Type here to search 0 f K12 E F B A 1 2 Zodiac Company records all of their transactions on a cash basis. Below you will see the results of operations of Zodiac Company for the year ended 12/31/19. 3 4 5 6 Zodiac Company Income Statement 7 For the Year Ended December 31, 2019 8 Sales $ 252,000 9 Selling & Admin Expenses 10 Salaries Expense $78,000 11 Rent Expense $ 45,000 12 Commission Expense $ 37,800 13 Equipment $ 30,000 14 Utilities Expense $ 29,000 15 Insurance Expense $ 6,000 16 Interest Expense $ 3,000 $228,800 17 Net Income $ 23,200 18 19 20 21 The company has been asked by the bank to submit financial statements in the accrual method of accounting. Use the income statement and the information provided below to make the adjustments necessary to change the income statement from the cash basis to the accrual basis of accounting. Required: 1. Prepare the journal entries that are necessary 2. Complete the revised Income Statement in accrual basis accounting. 22 23 24 25 a. There are several customer accounts outstanding at year end. The total amount waiting to be collected is $25,000. Of that amount, $3,500 is expected to be uncollectible. b. The company rents its parking garage for $5,000 per month. The tenant must pay quarterly and pay in advance. The contract was signed on January 1, 2019 c. Sales personnel are paid a 10% commission. The commission is paid on the way the cash is received for the sale. d. On May 1, Zodiac took out a loan to purchase new equipment. The loan was a 12 month loan for $30,000 at 12% interest. Interest payments are required to be paid quarterly. The first payment is due on August 1, 2019. e. Salaries paid on January 4, 2020 included amounts earned in December 2019. The amount of the 2019 salaries was $12,500. Ignore payroll taxes. f. The electric bill for December's electric costs in the amount of $2,800 was paid January 10, 2020. g. Equipment of $30,000 was purchased on January 1, 2019. The expected life is five years, no salvage value. Assume straight-line depreciation. h. Zodiac Company purchased a liability insurance policy on July 1, 2019 for $6,000. The insurance policy is paid in advance for the following year. i. The company's income tax rate is 40%. The company has made no prepayments