accounting practice problem 4

Saved ercises & Problems [The following information applies to the questions displayed below. Pastina Company sells various types of pasta to grocery chains as private label brands. The company's reporting year-end is December 31. The unadjusted trial balance as of December 31, 2021, appears below. Credits Debits 30,000 40,000 1,500 60,000 20,000 0 2,000 6,000 80,000 Account Title Cash Accounts receivable Supplies Inventory Notes receivable Interest receivable Prepaid ront Prepaid insurance Office equipment Accumulated depreciation Accounts payable Salaries payable Notes payable Interest payable Deferred sales revenue Common stock Retained earnings Dividends Sales revenue Interest revenue Cost of goods sold Salaries expense Rent expense Depreciation expense Interest expense Supplies expense Insurance expense Advertising expense Totals 30,000 31,000 0 50,000 0 2,000 60,000 28,500 4,000 146,000 0 70,000 18,900 11,000 0 0 1,100 0 3,000 347,500 347,500 Information necessary to prepare the year-end adjusting entries appears below. Exercises & Problems Saved Help Save CI Insurance expense Advertising expense Totals 0 3.000 347,500 347,500 Information necessary to prepare the year-end adjusting entries appears below. 1. Depreciation on the office equipment for the year is $10,000. 2. Employee salaries are paid twice a month, on the 22nd for salaries earned from the 1st through the 15th, and on the 7th of the following month for salaries earned from the 16th through the end of the month Salaries earned from December 16 through December 31, 2021, were $1,500. 3. On October 1, 2021, Pastina borrowed $50,000 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years. 4. On March 1, 2021, the company lent a supplier $20,000, and a note was signed requiring principal and interest at 8% to be paid on February 28, 2022 5. On April 1, 2021, the company paid an insurance company $6,000 for a one-year Wire insurance policy. The entire $6,000 was debited to prepaid insurance. 6. $800 of supplies remained on hand at December 31, 2021. 7. A customer paid Pastina $2,000 in December for 1,500 pounds of spaghetti to be delivered in January 2022. Pastina credited deferred sales revenue. 8. On December 1, 2021, $2,000 rent was paid to the owner of the building. The payment represented rent for December 2021 and January 2022 at $1,000 per month. The entire amount was debited to prepaid rent 4. Prepare an income statement and a statement of shareholders' equity for the year ended December 31, 2021, and a classified balance sheet as of December 31, 2021. Assume that no common stock was issued during the year and that $4,000 in cash dividends were paid to shareholders during the year. Complete this question by entering your answers in the tabs below. Tnrnme Statement of 4 Statement SE balance sheet Prepare the income statement for the year ended December 31, 2021. (Other expenses should be indica sign. Do not round intermediate calculations. Round your final answers to nearest whole dollar.) Part 3 of 5 PASTINA COMPANY Income Statement For the Year Ended December 31, 2021 1 points eBook Print References were paid to shareholders during the year. Complete this question by entering your answers in the tabs below. 5 Income Statement Statement of SE Balance Sheet Prepare the statement of shareholders' equity for the year ended December 31, 2021. (Do not round int calculations. Round your final answers to nearest whole dollar.) PASTINA COMPANY Statement of Shareholders' Equity For the Year Ended December 31, 2021 ices Common Stock Retained Earnings Balance at January 1, 2021 Total Shareholders' Equity Add: Dividends Add: Net loss Less: Dividends Saved 2 Exercises & Problems i PASTINA COMPANY Balance Sheet At December 31, 2021 Assets of 5 ook rint rences Liabilities and Shareholders' Equity Required information 15 Liabilities and Shareholders' Equity ces