Big Consulting Co. provides consulting services to advise start up and small businesses to help them grow their business. The companys adjusted trial balance has been provided to you by the company as follows. Your team has completed an audit of the companys records for the year 2020. The books for 2020 are not yet closed.

Big Consulting Co.
Adjusted Trial Balance
12/31/20
		Trial Balance
		DR	CR
Cash		$ 16,250
Fees receivable		$ 12,000
Investment Prepaid rent		$ 26,300 $ 600
Unexpired insurance policies		$ 4,250
Office supplies		$ 530
Office equipment		$ 15,000
Accumulated deprec: office equipment			$ 12,000
Accounts payable			$ 5,650
Notes payable			$ 10,000
Unearned agency fees			$ 5,500
Salaries payable			$ 1,360
Income tax payable			$ 1,230
Common stock (par value $1)			$ 20,000
Retained earnings			$ 10,800
Dividends		$ 800
Agency fees earned			$ 55,070
Telephone expense		$ 480
Office supply expense		$ 1,500
Depreciation expense: office equipment		$ 3,000
Rent expense		$ 6,700
Insurance expense		$ 1,300
Salaries expense		$ 25,500
Fines expense		$ 3,500
Income taxes expense		$ 3,900
Totals		$ 121,610	$ 121,610

Upon completion of the audit of the above 2020 trial balance, you identify the following issues (assume all are material):

1. The company forgot to include an accrual for an employees salary at the end of 2020. Salaries of $4,450 will be paid during the first week in January 2021 for work performed during the last week in December.
2. The controller mistakenly recorded the purchase of a $2,100 computer with a 3-year life (SL) as an expense in 2018. The computer was purchased on May 1, 2018.
3. On June 1, 2018, the company borrowed $10,000 by signing a 5-year 6% note payable. The note is a balloon loan with all interest and principal due at the end of the loan. No interest was recorded.
4. A four-year casualty insurance policy was purchased on September 30, 2019 for $4,250. The full amount was debited to unexpired insurance and no subsequent journal entries have been made.
5. On July 1, 2019, the company purchased 7,500 shares of the 30,000 shares outstanding in ABC Co. and recorded the investment at cost equal to $26,300. ABC Co. earned $5,000 in net income in 2019 and $7,500 in 2020 and declared a $.50 per share dividend at year end 2020 but no dividend in 2019. The value of ABC Co. at year end 2019 was $108,000 and at year end 2020 is $105,000. For tax purposes, any increase or decrease in the value of an investment is not recorded until the asset is sold.
6. The income tax rate is 21% for all years. Assume book = tax depreciation.

INSTRUCTIONS:

1. Using Excel record any appropriate journal entries and prepare a 10-column worksheet.
2. Prepare an income tax provision and income tax journal entry.
3. Once your worksheet balances, then prepare a COMPLETE and fully formatted Balance Sheet, Income Statement and Statement of Retained Earnings in GOOD FORM in separate worksheets in excel.

(Note: The worksheet is NOT the financial statements.)

List out any assumptions you make.

Format, presentation, accuracy and excel use will all be graded.