Financial Accounting 17th edition chapter 5 5PSA step by step solution

Next Job, Inc., provides employment consulting services. The company adjusts its accounts monthly but performs closing entries annually on December 31. The firms unadjusted trial balance dated December 31, current year, is shown as follows.

Other Data

Accrued but unrecorded and uncollected consulting fees earned total $25,000 at December 31, current year.

The company determined that $15,000 of previously unearned consulting services fees had been earned at December 31, current year.

Office supplies on hand at December 31 total $300.

The company purchased all of its equipment when it first began business. At that time, the estimated useful life of the equipment was six years (72 months).

The company prepaid its nine-month rent agreement on June 1, current year.

The company prepaid its six-month insurance policy on December 1, current year.

Accrued but unpaid salaries total $12,000 at December 31, current year.

On September 1, current year, the company borrowed $60,000 by signing an 8-month, 4 percent note payable. The entire amount, plus interest, is due on March 1, next year.

The companys accounting firm estimates that income taxes expense for the entire year is $50,000. The unpaid portion of this amount is due early in the next year.

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NEXT JOB, INC.

UNADJUSTED TRIAL BALANCE

DECEMBER 31, CURRENT YEAR

Cash $276,500

Accounts receivable 90,000

Office supplies 800

Prepaid rent 3,600

Unexpired insurance 1,500

Office equipment 72,000

Accumulated depreciation: office equipment $?24,000

Accounts payable 4,000

Notes payable (due 3/1/16) 60,000

Interest payable 600

Income taxes payable 9,000

Dividends payable 3,000

Unearned consulting fees 22,000

Capital stock 200,000

Retained earnings 40,000

Dividends 3,000

Consulting fees earned 500,000

Rent expense 14,700

Insurance expense 2,200

Office supplies expense 4,500

Depreciation expense: office equipment 11,000

Salaries expense 330,000

Utilities expense 4,800

Interest expense 3,000

Income taxes expense 45,000 ???????

Totals $862,600 $862,600

Instructions

Prepare the necessary adjusting journal entries on December 31, current year. Also prepare an adjusted trial balance dated December 31, current year.

From the adjusted trial balance prepared in part a, prepare an income statement and statement of retained earnings for the year ended December 31, current year. Also prepare the companys balance sheet dated December 31, current year.

Prepare the necessary year-end closing entries.

Prepare an after-closing trial balance.