Internet Consulting Service, Inc., adjusts its accounts every month. The company's year-end unad- justed trial balance...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Internet Consulting Service, Inc., adjusts its accounts every month. The company's year-end unad- justed trial balance dated December 31, 2018 follows. (Bear in mind that adjusting entries already have been made for the first 11 months of 2018, but have not been made for December.) Other Data 1. On December 1, the company signed a new rental agreement and paid three months' rent in advance at a rate of $2,100 per month. This advance payment was debited to the Prepaid Office Rent account. 2. Dues and subscriptions expiring during December amounted to $50. 3. An estimate of supplies on hand was made at December 31; the estimated cost of the unused supplies was $450. 4. The useful life of the equipment has been estimated at five years (60 months) from date of acquisition. 5. Accrued interest on notes payable amounted to $100 at year-end. (Set up accounts for Interest Expense and for Interest Payable.) 6. Consulting services valued at $2,850 were rendered during December to clients who had made payment in advance. 7. It is the custom of the firm to bill clients only when consulting work is completed or, in the case of prolonged engagements, at monthly intervals, At December 31, consulting services valued at $11,000 had been rendered to clients but not yet billed. No advance payments had been received from these clients. INTERNET CONSULTING SERVICE, INC. UNADJUSTED TRIAL BALANCE DECEMBER 31, 2018 $ 49.100 Cash Consulting fees receivable 23,400 Prepaid office rent 6.300 Prepaid dues and subscriptions 300 Supplies.. 600 Equipment 36,000 Accumulated depreciation: equipment $ 10,200 ....... Notes payable 5,000 ..... Income taxes payable 12,000 Unearned consulting fees.. 5,950 Capital stock 30,000 Retained earnings 32,700 Dividends 60,000 Consulting fees eamed 257,180 Salaries expense 88820 Telephone expense 2,550 Rent expense 22.000 Income taxes expense 51,000 Dues and subscriptions expense 560 Supplies expense.. 1,600 Depreciation expense equipment 6.600 4.200 $353.030 Miscellaneous expenses $353.030 8. Salaries carned by employees but not paid as of December 31 amount to S1.700. 9. Income taxes expense for the year is estimated at $56,000. Of this amount, $51,000 has been recognized as expense in prior months, and $39,000 has been paid to tax authorities. The company plans to pay the $17.000 remainder of its income tax liability on January 15. Instructions a. Prepare the necessary adjusting journal entries on December 31, 2018. b. Determine the amounts to be reported in the company's year-end adjusted trial balance for cach of the following accounts. Consulting Fees Earned Salaries Expense Telephone Expense Rent Expense Supplies Expense Dues and Subscriptions Expense Depreciation Expense: Equipment Miscellancous Expenses Interest Expense Income Taxes Expense c. Determine the company's net income for the year ended December 31, 2018. (Hint: Use the amounts determined in part b.) Internet Consulting Service, Inc., adjusts its accounts every month. The company's year-end unad- justed trial balance dated December 31, 2018 follows. (Bear in mind that adjusting entries already have been made for the first 11 months of 2018, but have not been made for December.) Other Data 1. On December 1, the company signed a new rental agreement and paid three months' rent in advance at a rate of $2,100 per month. This advance payment was debited to the Prepaid Office Rent account. 2. Dues and subscriptions expiring during December amounted to $50. 3. An estimate of supplies on hand was made at December 31; the estimated cost of the unused supplies was $450. 4. The useful life of the equipment has been estimated at five years (60 months) from date of acquisition. 5. Accrued interest on notes payable amounted to $100 at year-end. (Set up accounts for Interest Expense and for Interest Payable.) 6. Consulting services valued at $2,850 were rendered during December to clients who had made payment in advance. 7. It is the custom of the firm to bill clients only when consulting work is completed or, in the case of prolonged engagements, at monthly intervals, At December 31, consulting services valued at $11,000 had been rendered to clients but not yet billed. No advance payments had been received from these clients. INTERNET CONSULTING SERVICE, INC. UNADJUSTED TRIAL BALANCE DECEMBER 31, 2018 $ 49.100 Cash Consulting fees receivable 23,400 Prepaid office rent 6.300 Prepaid dues and subscriptions 300 Supplies.. 600 Equipment 36,000 Accumulated depreciation: equipment $ 10,200 ....... Notes payable 5,000 ..... Income taxes payable 12,000 Unearned consulting fees.. 5,950 Capital stock 30,000 Retained earnings 32,700 Dividends 60,000 Consulting fees eamed 257,180 Salaries expense 88820 Telephone expense 2,550 Rent expense 22.000 Income taxes expense 51,000 Dues and subscriptions expense 560 Supplies expense.. 1,600 Depreciation expense equipment 6.600 4.200 $353.030 Miscellaneous expenses $353.030 8. Salaries carned by employees but not paid as of December 31 amount to S1.700. 9. Income taxes expense for the year is estimated at $56,000. Of this amount, $51,000 has been recognized as expense in prior months, and $39,000 has been paid to tax authorities. The company plans to pay the $17.000 remainder of its income tax liability on January 15. Instructions a. Prepare the necessary adjusting journal entries on December 31, 2018. b. Determine the amounts to be reported in the company's year-end adjusted trial balance for cach of the following accounts. Consulting Fees Earned Salaries Expense Telephone Expense Rent Expense Supplies Expense Dues and Subscriptions Expense Depreciation Expense: Equipment Miscellancous Expenses Interest Expense Income Taxes Expense c. Determine the company's net income for the year ended December 31, 2018. (Hint: Use the amounts determined in part b.)
Expert Answer:
Answer rating: 100% (QA)
Worksheet Unadjusted Adjustments Adjusted Income Statement Balance Sheet Account Titles Debit Credit ... View the full answer
Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
Posted Date:
Students also viewed these accounting questions
-
The Off-Campus Playhouse adjusts its accounts every month. Below is the companys un-adjusted trial balance dated September 30, 2011. Additional information is provided for use in preparing the...
-
The Off-Campus Playhouse adjusts its accounts every month. The following is the company's unadjusted trial balance dated September 30, current year. Additional information is provided for use in...
-
We should also bear in mind that in todays business-oriented world economy, the cultures themselves are being significantly affected by business activities and business practices. Comment.
-
Reset all of the assumptions to the original values. Then assess the sensitivity of the impairment test results by changing the following assumptions listed below. Assumption Name: Revised...
-
The following data give information on the average ticket prices (in U.S. dollars) and the average percentage of capacity filled for seven hockey teams during the 20112012 National Hockey League...
-
Show that any arbitrary n-node binary search tree can be transformed into any other arbitrary n-node binary search tree using O (n) rotations. (Hint: First show that at most n - 1 right rotation...
-
A sample of five third graders took a reading test. They then participated in a reading improvement program, and took the test again to determine whether their reading ability had improved. Following...
-
You have recently been hired by Swan Motors, Inc. (SMI), in its relatively new treasury management department. SMI was founded 8 years ago by Joe Swan. Joe found a method to manufacture a cheaper...
-
"In a laissez-faire economy, an efficient financial intermediation system mobilises and allocates scarce resources towards activities that would optimise the rates of return. On this basis, the...
-
Deduce the structure of a compound with molecular formula C 5 H 10 O that exhibits the following IR, 1 H NMR, and 13 C NMR spectra. Data from the mass spectrum are also provided. 100 Mass Spec. Data...
-
Using the STAR analysing model, situation, task, action and result in problem solving techniques. As we discussed in this chapter, job design attempts to identify the most important needs of...
-
A child weighs 283 N. What is the child's mass in kilograms? kg What is the child's mass in slugs? slugs Need Help? Read It Submit Answer [-/2 Points] DETAILS Suppose an airline allows a maximum of...
-
On December 31, 2018, Blais Industries had long-term debt totaling $120,000 on their balance sheet. During 2019, they paid $10,000 in interest on that debt and $50,000 in principal. During the year...
-
One vector is given as = 3.35 - 2.66 + 2.99k. A second vector is given as B = 1.84 + 5.72 + 1.44k. (The input below will accept answers with no more than 1% variation from the correct value.) What is...
-
What are some thoughts about mental accounting that might be helpful in our discussions about how we value ( financially ) things?
-
An earthquake is started when two layers of rock under stress slip and wiggle past each other several times before coming to rest. This launches a wave through the rock, which violently wiggles the...
-
Why does Block believe there will ultimately be a loss in utility even if unemployment does not increase ?
-
Chris Zulliger was a chef at the Plaza Restaurant in the Snowbird Ski Resort in Utah. The restaurant is located at the base of a mountain. As a chef for the Plaza, Zulliger was instructed by his...
-
The following information is from the manufacturing budget and the budgeted financial statements of Fabor Fabrication: Direct materials inventory, Jan. 1 . . . . . . . . . . . . . . . . . . . . . . ....
-
We have made the point that managers often attempt to maximize the contribution margin per unit of a particular resource that limits output capacity. The following are five familiar types of...
-
Conklin Corporation recorded the following activities during its first month of operations: Purchased materials costing $250,000. Used direct materials in production costing $230,000. Incurred...
-
On May 1, 1999 you were engaged by a committee of shareholders to perform a special audit as of December 31, 1998, of the shareholders' equity of the Major Corporation, whose stock is actively traded...
-
The following covenants are extracted from the indenture of a bond issue. Although the bond due date is 2016, failure to comply with any covenant automatically advances the due date of the loan to...
-
Following are errors, frauds, or other circumstances that an auditor might encounter as a result of applying audit tests to capital stock as of December 31, the balance sheet date: a. Shareholders'...
Study smarter with the SolutionInn App