ch3-15

Grace Labeille opened a web consulting business called Travel Smart and recorded the following transactions in its first month of operations. April 1 Labeille invests $92,000 cash along with office equipment valued at $28,000 in the company. April 2 The company prepaid $11,400 cach for twelve month rent for office space. The company's policy is record prepaid expenses in balance sheet accounts. April 3 The company made credit purchasen for $8,400 in office equipment and $4,000 in office supplies. Payment is due within 10 dayu. April 6 The company completed services for a ellent and immediately received $5,200 canh. April 9 The company completed $8,000 project for client, who must pay within 30 days. Apr 11 13 The company paid $12,400 cash to settle the account payable created on April 3 April 19 The company paid $3,360 bath for the premium on a 12-month Insurance policy. The company's polley is record prepaid expenses in balance sheet accounts. April 22 The company received $4,800 cash au partial payment for the workloompleted on April 9. April 25 The company completed work for another client for $4,300 on credit April 28 Labeille withdrew $5,900 cash from the company for personal use April 29 The company purchased $1,000 of additional office supplier on credit. April 30 The company paid $1,100 cash for this month's utility bill Descriptions of items that require adjusting entries on April 30, 2021, follow. a) On April 2, the company prepaid $11,400 cash for twelve months rent for office space. b) The balance in Prepaid Insurance represents the premium paid for a 12-month insurance policy the policy coverage began on April 1 c) Office supplies on hand as of April 30 total $1,600. d) Straight-line depreciation of office equipment, based on a 5 year life and a $18.400 salvage value is $300 per month e) The company has completed work for a client, but has not yet billed the $2,600 fee. 1) Wages due to employees, but not yet paid, as of April 30 total $3.000 Adjusted TRAVEL SMART Balance Sheet April 30, 2021 ASSETS Current assets: Cash $ Accounts receivable Office supplies Prepaid rent Prepaid insurance 67,840 10,100 1,600 10,450 3,080 + 0 $ 93,070 36,400 (300) Total current assets Plant assets: Office equipment Accumulated depreciation - Office equipment Office equipment, net Total assets LIABILITIES AND EQUITY Liabilities: Accounts payable $ Wages payable 36,100 129,170 $ 1,000 3,000 0 Office supplies Prepaid rent Prepaid insurance 1,600 10,450 3,080 0 Total current assets $ 93,070 Plant assets: 36,400 (300) Office equipment Accumulated depreciation - Office equipment Office equipment, net Total assets LIABILITIES AND EQUITY Liabilities: Accounts payable Wages payable 36,100 129,170 1,000 3,000 0 4,000 Total liabilities Equity G. Labeille, Capital Total liabilities and equity 125,170 129,170 St Owners Equity Impact on Income statement tab. (Hint: Select unadjusted on the drop-down.) Adjusted Impact on net incomo $ Adjusting entry related to: Income Statement a) Rent (Ront expense b) Insurance Insurance expense c) Office supplies Office supplies expense Depreciation expense - Office d) Depreciation equipment e) Unbilied fees Services revenue 1) Unpaid wages Wages expense Total impact on income due to adjustments Not Income before adjustments Account affecting the Balance Sheet Prepaid rent Prepaid insurance Office supplies Accumulated depreciation Office equipment Accounts receivable Wagos payable (950)| (280) (3.400) (300) 2,600 (3.000) (5.330) $