Cash Discovery Inc an electronics retailer, commenced operations on January 1, 2020. The unadjusted trial balance for Discovery as of March 31, 2020, follows Unadjusted Trial Balance Acct. No. Accounts Debit Credit 100 331200 5 104 Accounts receivable 29.400 105 Supplies 2.700 106 Inventory 45.000 108 Prepaid insurance 1.800 155 Building 90,000 160 Equipment 48.000 202 Accounts payable 27.000 208 Deferred service revenue 1,080 240 Note payable 75.000 302 Common stod DO 300 Retained earnings 52.920 310 Dividends 900 400 Sales 210.000 510 Cost of goods sold 120.000 511 Operating expenses 9,000 520 es expenses 54,000 Tocals 142000 42.000 Additional information 1. Examination of supplies indicates that 1,800 of supplies are still available on March 31, 2020. 2. One year of insurance coverage was purchased on January 1, 2020, for $1.800 cash 3. The building and equipment (purchased on January 1, 2020) will be depreciated evenly over the useful lives of 30 years and 8 years, respectively, 14.5480 of the 51,080 in Deferred Service Revenue relates to service obligations to be performed after March 31, 2020 5. Annual interest on the note payable is 8%. Interest is due in one year upon the maturity of the note. The note was issued on January 1 2020. 6. Utilities for March 2020 of 5480 have been incurred but not yet paid 7. At the end of March, the company provided a new service to customers for in-home assessments. The company will bill customers 5360 in April for services performed in March 8. Additional general ledger accounts, currently with a zero balance are: 170 Accumulated Depreciation-Building 516 Supplies Expense 121 Accumulated Depreciation-Iquipment 512 Insurance Expense 203 Utilities Payable 518 Depreciation Expense 200 interest Payable 519 Ulities Expense 403 Service Revenue 530 inte pense Journal entries Trial balance Income Statement a. Prepare all necessary adjusting entries as of March 31 for the three-month period ended March 31, 2020. General Journal Account Name Ref. 1 Dr. Cr. 4 2 3 To record depreciation on building, . To record depreciation on equiment 4 5 e 6 . 2 . . Unadjusted Trial Balance Adjusted Trial Balance Acct. No. Accounts Debit Credit Debit Credit 100 Cash $31,200 $ $ $ 104 Accounts receivable 29,400 105 Supplies 2,700 106 Inventory 45,000 108 Prepaid Insurance 1,800 155 Building 90,000 160 Equipment 48,000 170 Accumulated depreciation-Building 171 Accumulated depreciation--Equipment 202 Accounts Payable 27,000 203 Utilities Payable 208 Deferred Service Revenue 1,080 209 Interest Payable 240 Note Payable 75,000 302 Common Stock 66,000 300 Retained Earnings 52,920 310 Dividends 900 400 Sales 210,000 403 Service Revenue 510 Cost of Goods Sold 120,000 515 Operating expense 9,000 516 Supplies Expense 517 Insurance Expense 518 Depreciation Expense 519 Utilities Expense 520 Salaries Expense 54,000 530 Interest Expense Totals $432,000 $432,000 On harte Journal entries Trial balance Income Statement c. Compute net income for the three months ended March 31, 2020. Note: Do not use negative signs with any of your answers. Income Statement for the 3-Months Ended March 31, 2020 Total revenues $ Total expenses Net Income $ $
