On May 1, 2011 a new business started up. Complete Adjusting Journal Entries: 1. At end of period, Accounting Department counted supplies on hand and discovered they amounted to $2,000. 2. Prepaid Insurance is a 12 month policy. May was its first month in effect. 3. A transaction was discovered amounting to $400 that had not been previously booked, billed or collected. 4. The Notes Payable is a one year note at 6%simple interest. The loan was effective the first day of this past month. Interest is payable at end of loan term. (remember interest formula: Interest - Principal x time x rate). Loan amt=$10,000. 5. For the "Advance" or "Uneared Service Revenue" received on May 1, 50% of the contract is complete. 6. Company employees work Monday through Friday and are paid weekly. The last day of the month is on a Thursday. Weekly payroll amounts to $3,000. Ref Date Description Debit Credit A/R Cash 40,200 (1st net) Supplies 5.000 (1st net) PP Insurance 1.200 (1st net) 200 (1st net) A/P Salaries Payable Interest Payable Notes Payable 10.000 4.000 TI TTTT (Unearned Revenue) Advances (1st net) 2,400 Common Stock (1st net) 20.000 Supplies Exp Revenue (1st net) Salaries Expense 9.000 (1st net) Rent Expense 800 00 PM (1 hou PP Ins. Expense Interest Expense PM (7 minute -Mostalo 3.04 2 Module 4.02 NOTE Do not begon until you get the 3.04 and sheit to chach your work. Adjusted Tr Nance Spreadsheet Account Title Adjust ments DR CR Ad Trial Balance CR Income Statement DR CR Balance Sheet DR CR CR DR Cash Accounts Receivable Supplies Prepaid Insurance Notes Pyable Accounts Payable Salaries Payable Interest Payable Unearned Service Revenue Common Stock Service Revenue Salaries expense Rent Expense Prepaid Insurance Expense Supplies Expense Interest Expense Trial Balance DR 40,200 200 5,000 1,200 10,000 4,000 0 0 2,400 20,000 20,000 9,000 800 Totals: 56,400 56,400 Gain or Loss 20,000 Shareholders Equity Common Stock Beginning Retained Earnings Add Profit Deduct Loss Sub-total Less Dividends Ending Retained Earnings Total stockholders' equity 0 6,250 0 6.250 0 6.250 6,250 26,250 Meclule 3,04 e Module 4.02 FINANCIAL STATEMENTS INCOME STATEMENT REVENUE EXPENSES Total Expenses: Profit or Loss: BALANCE SHEET ASSETS Total Assets: LIABILITIES Total liabilities: 20,000 STOCKHOLDERS EQUITY Common Stock Beginning Retained Earnings Add Profit Deduct Loss Sub-total Less Dividends Ending Retained Earnings Total stockholders' equity Total liabilities and stockholders equity 0 6,250 0 6,250 0 6,250 DO 6,250 26,250 43,900 Assets Liabilities + Stockholder's Equity Anul 304 Modul 4,02
