ANSWER EXERCISE 5-1 AND 2

ACCOUNTING PRINCIPLES 101 EXERCISE 5-2 INSTRUCTION: Prepare Financial Statements, Closing entries, and Post-closing trial balance. The adjusted trial balance of KAREN ADVERTISING AGENCY after posting of adjusting entries is shown below: KAREN ADVERTISING AGENCY Adjusted Trial Balance September 30, 2020 ACCOUNT TITLES DEBIT CREDIT Cash P 270.000 7,200 84,000 12,600 36,000 P 16,400 18,800 6,000 114.000 30.000 4.800 Commission Receivable Prepaid rent Office supplies Office equipment Accumulated depreciation office Furniture & Fixtures Accumulated Depreciation - Fur & Fix Notes payable Accounts payable Salaries payable Interest payable Unearned commission Karen Capital Karen Drawing Commission Earned Salaries expense Rent expense Office Supplies expense Depreciation Expense - Office Equip Depreciation Expense - Fur & Fix Interest Expense Total 1,200 24,000 200,000 32,000 175,200 64,800 36,000 6,600 2,400 1,000 200 P 571, 600 P 571, 600 102 ACCOUNTING PRINCIPLES PROBLEM 5-1 The Trial Balance of MESTIOLA LAUNDROMAT at December 31, the end of the current fiscal year, and data needed for year-end adjustments are presented below: 10,110 MESTIOLA LAUNDROMAT TRIAL BALANCE December 31, 2020 ACCOUNT TITLES DEBIT CREDIT Cash P 8,250 Laundry Supplies Prepaid Insurance 3.120 Laundry Equipment 58,000 Accumulated Depreciation P 20,000 Office Equipment 40,000 Accumulated Depreciation 14,000 Accounts Payable 1,550 Mestiola, Capital 34,950 Mestiola, Drawing 30,000 Laundry Revenue 125,200 Wages Expense 29,500 Rent Expense 8,200 Utilities Expense 5.100 Miscellaneous Expense 3.420 Total P195.700 P195.700 ADJUSTMENT DATA: a. Laundry supplies on hand, P 2,850. b. Insurance expired, P2,500. C. Depreciation - Laundry Equipment, P 20,000 d. Depreciation - Office Equipment P 16,000 e. Wages accrued are December 31, ) 18,000. Instructions: 1. Complete worksheet. 2. Prepare an income statement, Capital statement and Balance Sheet. (Report form)