P4-7 Recording Adjusting and Closing Entries and Preparing a Balance Sheet and Income Statement Including Earnings per Share LO4-1, 4-2, 4-4

Skip to question

[The following information applies to the questions displayed below.]

Tunstall, Inc., a small service company, keeps its records without the help of an accountant. After much effort, an outside accountant prepared the following unadjusted trial balance as of the end of the annual accounting period on December 31:

Account Titles	Debit		Credit
Cash	$	46,000
Accounts receivable		10,600
Supplies		490
Prepaid insurance		690
Service trucks		16,800
Accumulated depreciation			$	8,800
Other assets		10,660
Accounts payable				2,370
Wages payable
Income taxes payable
Note payable (3 years; 10% interest due each December 31)				16,000
Common stock (4,700 shares outstanding)				1,976
Additional paid-in capital				17,784
Retained earnings				4,900
Service revenue				66,600
Remaining expenses (not detailed; excludes income tax)		33,190
Income tax expense
Totals	$	118,430	$	118,430

Data not yet recorded at December 31 included:

1. The supplies count on December 31 reflected $200 in remaining supplies on hand to be used in the next year.
2. Insurance expired during the current year, $690.
3. Depreciation expense for the current year, $4,100.
4. Wages earned by employees not yet paid on December 3, $580.
5. Income tax expense, $5,080.

rev: 10_03_2016_QC_CS-63896

P4-7 Part 3

3. Record the closing entry. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)