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Posted on Jun 14, 2024

he Smart Deals Company began operations on December 1, 2019. The unadjusted trial balance of the Smart Deals Company as of December 31, 2019 is

he Smart Deals Company began operations on December 1, 2019. The unadjusted trial balance of the Smart Deals Company as of December 31, 2019 is found on the trial balance tab. The following information is required to prepare the necessary adjusting entries for the Smart Deals Company found in chapter 3.

1) The balance in Prepaid insurance represents a 24-month policy that went into effect on December 1, 2019.Review the unadjusted balance in Prepaid insurance, and prepare the necessary adjusting entry, if any.
2) Based on a physical count, supplies on hand total $4,650.Review the unadjusted balance in Supplies, and prepare the necessary adjusting entry, if any.
3) The equipment is expected to have a 4-year useful life, and be worth about $10,000 at the end of four years. Review the unadjusted balance in Accumulated depreciation, and prepare the necessary adjusting entry, if any.
4) On December 26, the client paid a $9,000 60-day fee in advance, covering December 27 to February 24. Review the unadjusted balance in Unearned Consulting Revenue, and prepare the necessary adjusting entry, if any.
5) Smart Deals's sole employee earns $120 per day for a five-day workweek beginning on Monday and ending on Friday.The employee was last paid on Friday, December 26.Review the unadjusted balance in Salaries payable, and prepare the necessary adjusting entry, if any.
6) In the second week of December, Smart Deals agreed to provide 30 days of consulting services to a local fitness club for a fixed fee of $3,900. The terms of the initial agreement call for Smart Deals to provide services from December 12, 2019, through January 10, 2020, or 30 days of service. The club agrees to pay Smart Deals $3,900 on January 10, 2020, when the service period is complete.Review the unadjusted balance in Consulting revenue, and prepare the necessary adjusting entry, if any.

Prepare the required adjusting and closing entries for the Smart Deals Company.

Required Information Use the following information for Quick Studies below. [The following information applies to the questions displayed below.] The following is the adjusted trial balance of Sierra Company. Account Title Debit Credit Cash $13, 090 Prepaid insurance 989 Notes receivable (due in 5 years) 4, 809 Buildings 40,989 Accumulated depreciation-Buildings $16,098 Accounts payable 4,580 Notes payable (due in 3 years) 5,989 H. Sierra, Capital 16,589 H. Sierra, Withdrawals 3,089 Consulting revenue 29,589 Wages expense 3,989 Depreciation expense-Buildings 4,980 Insurance expense 1,989 Totals $71, 580 $71,589 QS 4-10 Preparing financial statements LO C2 Required (1) Prepare an income statement for the year ended December 31. (2) Prepare a statement of owner's equity for the year ended December 31. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a statement of owner's equity for the year ended December 31. Owner made no investments during the current period. SIERRA COMPANY Statement of Owner's Equity H. Sierra, Capital, December 31 prior year end H. Sierra, Capital, December 31 current year end S Required 1 Required 2Income Requirement General General St Owner Journal Ledger Trial Balance Statement Equity Balance Sheet|Work Sheet Each journal entry is posted automatically to the general ledger. Use the drop-down button to view the unadjusted or adjusted balances, Unadjusted General Ledger Account Cash Supplies No. Date Debit Credit Balance No. Date Debit Credit Balance Dec 30 14,255 Dec 30 5,200 Prepaid insurance Equipment No Date Debit Credit Balance No. Date Debit Credit Balance Dec 30 B,400 Dec 30 36,400 Accounts payable Unearned consulting revenue No Date Debit Credit Balance No. Date Debit Credit Balance Dec 30 14,200 Dec 31 9,000 D. Kelley, Capital D. Kelley, Withdrawals No. Date Debit Credit Balance No. Date Debit Credit Balance Dec 31 88,000 1,200 Consulting revenue Rental revenue No Date Debit Credit Balance No. Date Debit Credit Balance Dec 30 8,80 Dec 30 400 Salaries expense Rent expense No Date Debit Credit Balance No. Date Debit Credit Balance Dec 30 2,040 Dec 30 1,500 Utilities expense No Date Debit Credit Balance Dec 30 405Requirement General General Income St Owner Int Joumal Ledger Trial Balance Statement Equity Balance Sheet |Work Sheet You may view either the unadjusted, adjusted, or post-closing trial balance by choosing from the dropdown box below. Your choice will determine the reported values on the financial statement tabs. Int Unadjusted Smart Deals ences Trial Balance December 31, 2017 Account Title Debit Credit +Cash S 14,255 + Supplies 3,200 Prepaid insurance 8,400 Equipment 36,400 Accounts payable 14,200 Unearned consulting revenue 9,000 -D. Kelley, Capital 38,000 D. Kelley, Withdrawals 1,200 Consulting revenue 8.800 Rental revenue 100 ~ Salaries expense 2,040 Rent expense 1,500 Utilities expense 405 Total S 70.400 5 70,400 Requirement General General Joumal Ledger Trial Balance Income St Owner Statement Equity Balance Sheet | Work Sheet Revenues and expenses are temporary equity accounts. They represent the change in equity attributable to the operation of the business during the current period. These temporary equity amounts are closed at the end of each account period. Unadjusted Smart Deals Income Statement For Month Ended December 31, 2019 Revenues: Expenses: Requirement General General Income St Owner Journal Ledger Trial Balance Statement Equity Balance Sheet Work Sheet There are four subsets of equity: Investments by the owner, withdrawals by the owner, revenues and expenses. These four subsets are compiled in the owner's capital account at the end of the period during the closing entry process. The ending capital balance is transferred to the equity section of the balance sheet. Smart Deals Statement of Owner's Equity For Month Ended December 31, 2019 D. Kelley, Capital, December 31, 2019 38,000 Smart Deals Balance Sheet December 31, 2019 Assets Current assets: Total current assets: Plant assets: Equipment, net Liabilities Equity Requirement General General Income Joumal Ledger Trial Balance St Owner Statement Equity Balance Sheet Work Sheet One of the benefits of a work sheet is that it links accounts and adjustments to their impacts in financial statements. Complete the work sheet below for the Smart Deals Company. Unadjusted Smart Deals Company Work Sheet For the Year Ended December 31, 2019 Unadjusted Trial Balance Adjustments Adjusted Trial Balance Income Statement St. of Owner's Equity & Balance Sheet Account Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Cash 14,255 Accounts receivable 0 Supplies 3,200 Prepaid insurance 8,400 Equipment 36,400 Accumulated depreciation Accounts payable 14,200 Salaries payable Unearned consulting revenue 9,000 D. Kelley, Capital 38,000 D. Kelley, Withdrawals 1,200 Consulting revenue 8,800 Rental revenue 400 Depreciation expense Salaries expense 2,040 nsurance expense Rent expense 1,500 Supplies expense Utilities expense 405 Totals 70,400 70,400 Net income Totals