Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Below is a trial balance of Pioneer Advertising agency Pioneer Advertising Agency Trial Balance As at October 31,2018 Debit $ Credit $ Cash 15,200 Supplies

Below is a trial balance of Pioneer Advertising agency

Pioneer Advertising Agency

Trial Balance

As at October 31,2018

Debit $ Credit $

Cash 15,200

Supplies 2500

Prepaid Insurance 600

Equipment 5,000

Notes Payable 5,000

Accounts Payable 2,500

Un earned Service Revenue 1,200

Owners Capital 10,000

Owners Drawings 500

Service Revenue 10,000

Salaries and Wages 4,000

Rent Expenses 900

Totals 28,700 28,700

Additional information:

  1. An inventory count at the close of business on October 31 reveals that $1,000 of supplies are still on hand.
  2. On October 4, Pioneer Advertising paid $600 for a one-year fire insurance policy.
  3. assume that depreciation on the equipment is $480 a year, or $40 per month.
  4. Pioneer Advertising received $1,200 on October 2 from R. Knox for advertising services expected to be completed by December 31.
  5. In October, Pioneer Advertising earned $200 for advertising services that were not billed to clients on or before October 31.
  6. On November 10, Pioneer receives cash of $200 for the services performed in October.
  7. Pioneer Advertising signed a three-month note payable in the amount of $5,000 on October 1. The note require the company to pay interest at a rate of 12% pa.
  8. At October 31, the salaries and wages for these three days represent an accrued expense and a related liability to Pioneer. The employees receive total salaries and wages of $2,000 for a five-day work week, or $400 per day.
  9. Pioneer Advertising pays salaries and wages every two weeks. Consequently,

the next payday is November 9, when the company will again pay total salaries and wages of $4,000. The payment consists of $1,200 of salaries and wages payable at

October 31 plus $2,800 of salaries and wages expense for November (7 working days, as shown in the November calendar (3 *$400).

Note the company does not operate on weekends

Required:

  1. Prepare journals to record the above adjustments.
  2. Prepare an adjusted trial balance.
  3. Prepare income statement.
  4. Prepare statement of financial position.
  5. Prepare journals to close the ledger accounts.
  6. Prepare a post-closing Trial Balance.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Economic Influences On The Development Of Accounting In Firms

Authors: George J. Staubus

1st Edition

0367721325, 9780367721329

More Books

Students also viewed these Accounting questions

Question

Is the sample selected related to the target population?

Answered: 1 week ago

Question

List at least three advantages to using a consultant.

Answered: 1 week ago