Big Blue Rental Corp. provides rental agent services to apartment building owners. Big Blue Rental Corp.'s preliminary income statement for August 2019 and its August 31, 2019, preliminary balance sheet did not reflect the following: a. Rental commissions of $640 had been earned in August but had not yet been received from or billed to building owners. b. When supplies are purchased, their cost is recorded as an asset. As supplies are used, a record of those used is kept. The record sheet shows that $500 of supplies were used in August. c. Interest on the note payable is to be paid on May 31 and November 30. Interest for August has not been accruedthat is, it has not yet been recorded. (The Interest Payable of $80 on the balance sheet is the amount of the accrued liability at July 31.) The interest rate on this note is 10%. d. Wages of $400 for the last week of August have not been recorded. e. The Rent Expense of $1,440 represents rent for August, September, and October, which was paid early in August. f. Interest of $420 has been earned on notes receivable but has not yet been received. g. Late in August, the board of directors met and declared a cash dividend of $4,200, payable September 10. Once declared, the dividend is a liability of the corporation until it is paid. Required: a. Using the columns provided on the income statement and balance sheet for Big Blue Rental Corp., make the appropriate adjustments/corrections to the statements, and enter the correct amount in the Final column. (Hint. Use the five questions of transaction analysis.) Required: a. Using the columns provided on the income statement and balance sheet for Big Blue Rental Corp., make the appropriate adjustments/corrections to the statements, and enter the correct amount in the Final column. (Hint. Use the five questions of transaction analysis.) BIG BLUE RENTAL CORP. Income Statement August 2019 Adjustments / Corrections Preliminary Debit Credit Final Commissions revenue 9,500 Interest revenue Total revenues $ 3,100 12,600 1,440 Rent expense Wages expense Supplies expense 2,520 Interest expense Total expenses $ $ 3,960 8,640 Net income (Enter amounts in the Adjustments/Corrections columns as positive numbers. Net income Adjustments/Corrections: Please use the numbers from the Income Statement and enter amounts in both the Debit and Credit columns.) BIG BLUE RENTAL CORP. Balance Sheet August 31, 2019 Adjustments / Corrections Preliminary Debit Credit Final $ 1,500 27,000 2,700 31,200 $ Assets Cash Notes receivable Commissions receivable Interest receivable Prepaid rent Supplies Total assets Liabilities and Stockholders' Equity Accounts payable Notes payable Interest payable Wages payable Dividends payable Total liabilities Paid-in capital Retained earnings: 4,800 80 $ $ 5,480 4,800 Notes receivable 27,000 Commissions receivable Interest receivable 2,700 31,200 $ $ 600 Prepaid rent Supplies Total assets Liabilities and Stockholders' Equity Accounts payable Notes payable Interest payable Wages payable Dividends payable Total liabilities 4,800 80 | $ $ 5,480 4,800 Paid-in capital Retained earnings: Balance, August 1 12,280 Net income 8,640 Dividends Balance, August 31 Total stockholders' equity Total liabilities and stockholders' equity $ $ 20,920 25,720 31,200
