Chapter 4

Trotmans Variety Store is completing the accounting process for the current year just ended, December 31. The transactions during the year have been journalized and posted. The following data with respect to adjusting entries are available:

Required information [The following information applies to the questions displayed below.] Tunstall, Inc., a small service company, keeps its records without the help of an accountant. After much effort, an outside accountant prepared the following unadjusted trial balance as of the end of the annual accounting period on December 31: Tunstall, Inc. Unadjusted Trial Balance for the Year Ended December 31 Credit Debit 47,300 11,500 570 770 16,700 7,900 10, 460 2,210 Cash Accounts receivable Supplies Prepaid insurance Service trucks Accumulated depreciation Other assets Accounts payable Wages payable Income taxes payable Notes payable, long-term Common stock (4,400 shares outstanding) Additional paid-in capital Retained earnings Service revenue Wages expense Remaining expenses (not detailed; excludes income tax) Income tax expense Totals 15,000 1,946 17,514 5,300 86,910 16,200 33,280 136,780 136, 780 Data not yet recorded at December 31 included: a. The supplies count on December 31 reflected $170 in remaining supplies on hand to be used in the next year. b. Insurance expired during the current year, $770. c. Depreciation expense for the current year, $3,500. d. Wages earned by employees not yet paid on December 31, $520. e. Income tax expense, $5,480. Required: 1. Record the adjusting entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 2-a. Prepare an income statement that include the effects of the preceding five transactions. (Round "Earnings per share" to 2 decimal places.) TUNSTALL, INC. Income Statement Earnings per share 2-b. Prepare a classified balance sheet that include the effects of the preceding five transactions. (Amounts to be deducted should be indicated by a minus sign.) TUNSTALL, INC. Balance Sheet 3. Record the closing entry. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)