Four Wheels Inc. is a car repair shop and retailer of car parts operating out of Vancouver. The founder, Carl Markus is the president and owns 100% of the common shares. The company's yearend is December 31. The inhouse bookkeeper had a skiing accident and is unfortunately not able to prepare the 2019 financial statements. It is now January 2020 and you have been asked to make any required adjusting journal entries and prepare the 2019 financial statements. The unadjusted trial balance for Four Wheels is contained in the appendix: The following information has been made available for you to make any required adjusting entries. 1. The following invoices were received in January 2020 and were not accrued in 2019. Legal fees $1,000 Janitorial services $2,200 Repairs to photocopier $600 Two desktop computers $4,200 2. You noticed a purchase order placed by Four Wheels was placed for a new forklift in November 2019 that will be delivered in April of 2020. At the time the order was placed a $4,000 deposit was provided and it was charged to equipment 3. 10% of the bank loan will be paid in 2020. The remainder will be paid over the following four years. No payments on the principal of the loan were made in 2019. 4. The interest rate on the bank loan is 6% per annuum paid quarterly. There was no payment made for the last quarter of the year 5. Depreciation on the current equipment is $25,000. 6. The two desktop computers above were delivered and operating June 30, 2019 and have a life of 4 years with a residual value of $400 in total for both computers. No entry was made when they were delivered. 7. The insurance was purchased March 31, 2019 and covered two years from that date. 8. A physical review of some inventory that was purchased for $5,000 is now obsolete and worthless. ( see chapter 7 of textbook) 9. During 2019 an old photo copier that had an original cost of $2,000 and accumulated depreciation of $1,700 was thrown out. (see chapter 8 of textbook) 10. $12,000 of staff salaries were owed at the end of the year. As well, Carl Markus is going to be paid a $5,000 bonus. 11. A physical count of the supplies inventory indicated the value at year end was $7,200. 12. In October a customer paid a $500 deposit for a custom car work to be performed in January 2020. At the time, this was recorded as sales. 13. Income is taxed at 35%. In Excel, prepare all the necessary journal entries, adjusted trial balance, income statement, statement in changes in shareholders' equity and balance sheet for December 31, 2019. Trial Balance as December 31, 2019 Debit Credit 279,000 95,000 300,000 372,000 99,200 30,000 305,000 2,650,000 150,000 1,556,500 150,000 185,000 Cash Accounts Payable Accounts Receivable Equipment Accumulated Depreciation equipment Advertising expense Bank loan Sales Common shares COGS Dividends declared Goodwill Income tax expense interest expense-bank loan inventory Prepaid insurance Rent expense Retained earnings Salaries expense Bonus expense Supplies Inventory(A) Customer deposits (L) Depreciation expense Legal fees Repairs expense interest payable Deposit (A) 18,300 340,000 12,000 120,000 452,000 376,000 12,400 Insurance expense salary payable bonus payable supplies expense Loss on disposal of equipment Janitorial services Current portion of bank loan Income tax payable Total 3,751,200 3,751,200 Trial Balance as December 31, 2019 Credit Debit 279,000 95,000 300,000 372,000 99,200 30,000 305,000 2,650,000 150,000 1,556,500 150,000 185,000 Cash Accounts Payable Accounts Receivable Equipment Accumulated Depreciation equipment Advertising expense Bank loan Sales Common shares COGS Dividends declared Goodwill Income tax expense interest expense-bank loan inventory Prepaid insurance Rent expense Retained earnings Salaries expense Bonus expense Supplies Inventory(A) Customer deposits (L) Depreciation expense Legal fees Repairs expense interest payable Deposit (A) 18,300 340,000 12,000 120,000 452,000 376,000 12,400 Copyright Steve Gibson 2021. Insurance expense salary payable bonus payable supplies expense Loss on disposal of equipment Janitorial services Current portion of bank loan Income tax payable Total 3,751,200 3,751,200 Four Wheels Inc. is a car repair shop and retailer of car parts operating out of Vancouver. The founder, Carl Markus is the president and owns 100% of the common shares. The company's yearend is December 31. The inhouse bookkeeper had a skiing accident and is unfortunately not able to prepare the 2019 financial statements. It is now January 2020 and you have been asked to make any required adjusting journal entries and prepare the 2019 financial statements. The unadjusted trial balance for Four Wheels is contained in the appendix: The following information has been made available for you to make any required adjusting entries. 1. The following invoices were received in January 2020 and were not accrued in 2019. Legal fees $1,000 Janitorial services $2,200 Repairs to photocopier $600 Two desktop computers $4,200 2. You noticed a purchase order placed by Four Wheels was placed for a new forklift in November 2019 that will be delivered in April of 2020. At the time the order was placed a $4,000 deposit was provided and it was charged to equipment 3. 10% of the bank loan will be paid in 2020. The remainder will be paid over the following four years. No payments on the principal of the loan were made in 2019. 4. The interest rate on the bank loan is 6% per annuum paid quarterly. There was no payment made for the last quarter of the year 5. Depreciation on the current equipment is $25,000. 6. The two desktop computers above were delivered and operating June 30, 2019 and have a life of 4 years with a residual value of $400 in total for both computers. No entry was made when they were delivered. 7. The insurance was purchased March 31, 2019 and covered two years from that date. 8. A physical review of some inventory that was purchased for $5,000 is now obsolete and worthless. ( see chapter 7 of textbook) 9. During 2019 an old photo copier that had an original cost of $2,000 and accumulated depreciation of $1,700 was thrown out. (see chapter 8 of textbook) 10. $12,000 of staff salaries were owed at the end of the year. As well, Carl Markus is going to be paid a $5,000 bonus. 11. A physical count of the supplies inventory indicated the value at year end was $7,200. 12. In October a customer paid a $500 deposit for a custom car work to be performed in January 2020. At the time, this was recorded as sales. 13. Income is taxed at 35%. In Excel, prepare all the necessary journal entries, adjusted trial balance, income statement, statement in changes in shareholders' equity and balance sheet for December 31, 2019. Trial Balance as December 31, 2019 Debit Credit 279,000 95,000 300,000 372,000 99,200 30,000 305,000 2,650,000 150,000 1,556,500 150,000 185,000 Cash Accounts Payable Accounts Receivable Equipment Accumulated Depreciation equipment Advertising expense Bank loan Sales Common shares COGS Dividends declared Goodwill Income tax expense interest expense-bank loan inventory Prepaid insurance Rent expense Retained earnings Salaries expense Bonus expense Supplies Inventory(A) Customer deposits (L) Depreciation expense Legal fees Repairs expense interest payable Deposit (A) 18,300 340,000 12,000 120,000 452,000 376,000 12,400 Insurance expense salary payable bonus payable supplies expense Loss on disposal of equipment Janitorial services Current portion of bank loan Income tax payable Total 3,751,200 3,751,200 Trial Balance as December 31, 2019 Credit Debit 279,000 95,000 300,000 372,000 99,200 30,000 305,000 2,650,000 150,000 1,556,500 150,000 185,000 Cash Accounts Payable Accounts Receivable Equipment Accumulated Depreciation equipment Advertising expense Bank loan Sales Common shares COGS Dividends declared Goodwill Income tax expense interest expense-bank loan inventory Prepaid insurance Rent expense Retained earnings Salaries expense Bonus expense Supplies Inventory(A) Customer deposits (L) Depreciation expense Legal fees Repairs expense interest payable Deposit (A) 18,300 340,000 12,000 120,000 452,000 376,000 12,400 Copyright Steve Gibson 2021. Insurance expense salary payable bonus payable supplies expense Loss on disposal of equipment Janitorial services Current portion of bank loan Income tax payable Total 3,751,200 3,751,200