Accounting Cycle Problem The John Marshall Company, Inc., which provides consulting services to major utility companies, was formed on January 2 of this year. Transactions completed during the first year of operation were as follows: January 2-Issued 600,000 shares of stock for $10,300,000. January 10-Acquired equipment in exchange for $2,600,000 cash and a $5,100,000 note payable. The note is due in ten years. February 1-Paid $12,000 for a business insurance policy covering the two-year period beginning on February 1. February 22-Purchased $900,000 of supplies on account March 1-Paid wages of $185,600 March 23-Billed $2,810,000 for services rendered on account April 1-Paid $120,000 of the amount due on the supplies purchased February 22. April 17-Collected $300,000 of the accounts receivable May 1-Paid wages of $200,400. May 8-Received and paid bill for $96,000 for utilities. May 24-Paid $44,000 for sales commissions. June 1- Made the first payment of 250,000 on the note issued January 10. The payment consisted of $50,000 interest and $200,000 applied against the principal of the note. June 16-Billed customers for $520,000 of services rendered. June 30 Collected $310,000 on accounts receivable. July 10- Purchased $150,000 of supplies on account. August 25-Paid $155,000 for administrative expenses. September 23-Paid $31,000 for warehouse repairs. October 1- Paid general wages of $91,000. November 20-Purchased supplies for $61,000 cash. December 15-Collected $145,000 in advance for services to be provided in December and January. December 30-Declared and paid a $55,000 dividend to shareholders. Assets: 101 Cash 102 Accounts receivable 103 Supplies 104 Prepaid insurance 110 112 Equipment Accumulated depreciation Liabilities: 201 Accounts payable 202 Unearned service revenue 203 Wages payable 210 Interest payable 220 Notes payable Stockholders' Equity: 301 Common stock 310 320 Retained earnings Dividends Revenues: 401 Service revenue Expenses: 501 Wage expense 502 Utility expense 503 Selling expense 504 Administrative expense 505 Repairs expense 506 Insurance expense 507 Supplies expense 510 Depreciation expense 520 Interest expense Other: 601 Income summary 1. Journalize the transactions for the year. 2. Post the journal entries to a T account. 3. Prepare an unadjusted trial balance as of December 31. 4. Journalize and post adjusting entries to the T accounts based on the following additional information; a. Eleven months of the insurance policy expired by the end of the year. b. Depreciation for equipment is $410,000. c. The company provided $92,000 of services related to the advance collection of December 15. d. There are $545,000 of supplies on hand at the end of the year. e. An additional $185,000 of interest has accrued on the note by the end of the year. f. Marshall accrued wages of $215,000 at the end of the ear. 5. Prepare an adjusted trial balance as of December 31. 6. Prepare a single-step income statement and statement of retained earnings for the year ended December 31 and a classified balance sheet as of December 31. 7. Journalize and post the closing entries 8. Prepare a post-closing trial balance as of December 31. A B Cash 101 Accounts Rec. 102 Notes Payable 2.20 Prepaid Insurance 104 Dividends 320 Depreciation expense 505 2-Jan 10,300,000 10-Jan 2,400,000 1-Feb 12,000 1-Mar 185,400 1-Apr 120,000 17-Apr 300,000 1-May 8-May 200,400 Retained Earnings 310 Accumulated Depreciation 112 Wage expense 501 Repairs expense 505 23-Sep 31,000 96,000 24-May 1-Jun 44,000 250,000 Supplies 103 Ending Balance 30-Jun 310,000 25-Aug 23-Sep 155,000 31,000 Uneamed service Revenue 202 1-00 91,000 Selling expenses 50 Supplies Expense 507 20-Nov 15-Dec 30-Dec 61,000 145,000 Service Revenue 401 55.000 Equement 110 nding Balance 10-Jan 7,700,00 Interest Payable 210 Ending Balance: Administrative Expenses 504 Interest Expense $20- Auct. Payable 201 22-Feb 25 Aug 155,000 Utitus expense 302 -May 96,000 Ending Balance Common Stock 301 Wigs Payable 203 Tarrots Income Summary 601 insurance Expense 506 1 Trial Balance Worksheets 2 3 4 Cash 5 Accounts receivable 6 Supplies 7 Prepaid insurance Equipment 9 Accumulated depreciation 10 Accounts payable 11 Unearned service revenue 12 Wages payable 13 Interest payable 14 Notes payable 15 Common stock 16 Retained earnings 17 Income summary 1 Dividends 19 Service revenue 20 Wage expense 21 Utilities expense 22 Selling expenses 23 Administrative expenses 24 Repairs expense 25 Insurance expense 25 Interest expense 27 Supplies expense 28 Depredation expense 20 H Adjusting Unadjusted trial balance Journal Entries Adjusted trial balance Closing Entries Deb Credit Debit Credit Debit Credit Debit Credit Post Closing Trial Balance Debit Credit Service revenue Expenses B Wage expense e Utilities expense O Selling expenses 1 Administrative expenses 2 Repairs expense 3 Insurance expense 4 Supplies expense 15 Depreciation expense 16. Interest expense 17 Total Expenses 18 19 Net Income John Marshal Company Income Statement for the Year ended 12/31/2020 20 21 2 234 Statement of Retained Earnings for the Year ended 12/31/2020 5 6 7 8 9 Net Income Dividends 10 Ending Balance 11 12 13 14 15 16 17 Paste H26 1234 7 86960 5 9 10 11 12 13 5 BIU x fx A < John Marshal Company Balance Sheet as of 12/31/2020 14 15 16 17 18 19 20 222 21 23 24 25 26 27 28 29 30 31 32 33 341 35 36 B C D E