A-L+E Project #3 78249 Unearned RevenuE Preview of Chapter Project 3 requires changing a chart of account listing that is in alphabetical order to ledger order, that is; assets, liabilities, equity, revenue, and expense. When accounts titles are in ledger order they can easily be transformed into financial statements. Recall that the income statement is prepared first, and that it includes the revenue and expense accounts. The statement of retained earnings is then prepared followed by the balance sheet. The balance sheet uses assets, liabilities, and equity accounts. Of course, the ending balance from the statement of retained earnings must be used in order to have balanced balance sheet! Prepare the first of the adjustments for gift card sales. When gift cards are sold, the seller has a liability revenue to show this liability. For this project, instead of using the generic account title of unearned revenue we will use gift cards liability to show what Fido's Food Mart owes to its customers who use gift cards to offer its goods or services in the future. Textbooks often use the account title unearned Prepare P and Record ing Trial Balance Journal Entries Record Closing Journal Entries Post to Ledger Accounts Prepare Unadjusted Trial Balance Prepare Financial Statements Prepare Adjusted Trial Balance Record Adjusting Journal Entries Courtesy of Laura K. Bantz and Ann Esarco Project s neaed Revenu 14. Fido's Food Mart General Ledger Accounts in Alphabetical Order November 30, 20xx Credits Debits Account Title 25,818 Accounts payable Accounts receivable 13,012 Accumulated depreciation - Equipment and vehicle 12,000 Bonds payable (mature 12/31/XX) 20,531 Cash Common stock (200 shares @$210/share, par $210) 42,000 Equipment 30,550 Inventory 44,160 Operating expenses 27,340 Rent expense 3,450 Retained earnings Sales revenue 82,625 Supplies Unearned revenue (gift cards) 1,850 0 Vehicle 12,250 Wages expense 9,300 Totals 162,443 162,443 The acccount balances at the end of the third month of operations at Fido's Food Mart are shown above in alphabetical order. Required: 1. On the last day of the month, the accountant took a look at ledger balances and noticed that a gift card sale was missed. Record the sale of fifteen (15) gift cards valued at $25 each a. Show the balancing effects on the accounting equation b. Record the journal entry in two-line format using a debit and a credit. c. Show T-accounts with beginning balances, transactions and end balances. 2. Prepare an updated unadjusted trial balance that reflects the gift card sale. Be sure to rearrange the accounts to reflect proper ledger order (i.e., assets, liabilities, etc.) 3. Using the updated trial balance prepared in step 2, prepare the following: Single-step income statement b. Statement of retained earnings c. Classified balance sheet Income Statement Balance Sheet