Exercise 1: Adjusting entries and income statement: (40 points)

During the month of March 2022 the company John Services, Ltd. realized the following transactions

March 1, Paid a 12 month insurance policy for $36,000

March 2: Paid the employee $44,000 for their work in February

March 4: collects $26,000 as an advanced payment by client Mrs. Glen. The project is to be delivered on March 18

March 18: delivers the project to Mrs. Glen

On March 30, Sent service fees to clients besides above mentioned Mrs. Glen for $347,000, all payable before April 15

March 31: records the salaries of March for $47,000 that will be paid on April 3rd

The assets of the company are the following: 4 computers with a unit cost of $1,200 purchased on January 2022 and a useful life of 4 years and a car purchased $36,000 on December 31, 2021 with a useful life of 6 years. The company uses straight-line method for depreciation purposes.

1: Prepare the general journal of the company for the month of March 2022 (20 points)

2: Prepare the income statement of the company for the month ended on March 31, 2022 (20 points)

Exercise 2: Reporting financial results: (60 points)

On April 1st, the company Littleco, Ltd showed the following balance sheet

During the month of April the revenues and expenses of the company were the following

All accounts receivable have been collected

All accounts payable listed on the 1st of April Balance sheet have been settled.

Recorded revenues for $222,500 paid in cash

Recorded salary expenses for 52,000 paid in cash

Recorded depreciation expense for the computers for $1,800

Recorded water expense for $3,200 payable in May

Recorded insurance expense for $1,000

1: Prepare the income statement of the company for the month of April 2022 (20 points)

2: Prepare the closing entries on the general journal of the company (20 points)

3: Prepare a balance sheet of Littleco, Ltd. at April 1st (20 points)