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Pastina Company sells various types of pasta to grocery chains as private label brands. The company's reporting year-end is December 31. The unadjusted trial balance
Pastina Company sells various types of pasta to grocery chains as private label brands. The company's reporting year-end is December 31. The unadjusted trial balance as of December 31, 2021, appears below. Account Title Debits Credits Cash 31,700 Accounts receivable 40,400 Supplies 1,700 Inventory 60,400 Notes receivable 20,400 0 Interest receivable Prepaid rent 1,100 Prepaid insurance 6,400 office equipment 81,600 Accumulated depreciation 30,600 Accounts payable 31,400 salaries payable 0 50,400 Notes payable Interest payable 0 Deferred sales revenue 2,200 Common stock 62,800 29,500 Retained earnings Dividends 4,400 sales revenue 148,000 0 Interest revenue 72,000 Cost of goods sold salaries expense Rent expense 19,100 11,200 Depreciation expense 0 Interest expense 0 Supplies expense 1,300 Insurance expense Advertising expense Totals 3,200 354,900 354,900 Information necessary to prepare the year-end adjusting entries appears below. 1. Depreciation on the office equipment for the year is $10,200. 2. Employee salaries are paid twice a month, on the 22nd for salaries earned from the 1st through the 15th, and on the 7th of the following month for salaries earned from the 16th through the end of the month. Salaries earned from December 16 through December 31, 2021, were $850. 3. On October 1, 2021, Pastina borrowed $50,400 from a local bank and signed a note. The note requires Interest to be paid annually on September 30 at 12%. The principal is due in 10 years. 4. On March 1, 2021, the company lent a supplier $20,400 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2022. 5. On April 1, 2021, the company paid an Insurance company $6,400 for a one-year fire Insurance policy. The entire $6,400 was debited to prepaid Insurance. 6. $530 of supplies remained on hand at December 31, 2021. 7. A customer paid Pastina $2,200 in December for 850 pounds of spaghetti to be delivered in January 2022. Pastina credited deferred sales revenue. 8. On December 1, 2021, $1,100 rent was paid to the owner of the building. The payment represented rent for December 2021 and January 2022 at $550 per month. The entire amount was debited to prepaid rent. 4. Prepare an income statement and a statement of shareholders' equity for the year ended December 31, 2021, and a classified balance sheet as of December 31, 2021. Assume that no common stock was issued during the year and that $4,400 in cash dividends were paid to shareholders during the year. Answer is not complete. Complete this question by entering your answers in the tabs below. Statement of Income Statement Balance Sheet SE Prepare the income statement for the year ended December 31, 2021. (Other expenses should be indicated with a minus sign.) PASTINA COMPANY Income Statement For the Year Ended December 31, 2021 Sales revenue S 155,000 Cost of goods sold 72,000 Gross profit 83,000 Operating expenses Cost of goods sold 3,200 Salaries expense Rent expense Depreciation expense (1,300) Supplies expense Insurance expense Advertising expense (11,200) (19,100) Total operating expenses Gross loss Gross loss Interest revenue Interest expense Net income X S (28,400) 54,600 0 54,600 4. Prepare an Income statement and a statement of shareholders' equity for the year ended December 31, 2021, and a classified balance sheet as of December 31, 2021. Assume that no common stock was issued during the year and that $4,400 in cash dividends were paid to shareholders during the year. Answer is not complete. Complete this question by entering your answers in the tabs below. Income Statement Statement of Balance Sheet SE Prepare the statement of shareholders' equity for the year ended December 31, 2021. PASTINA COMPANY Statement of Shareholders' Equity For the Year Ended December 31, 2021 Common Stock Retained Earnings Total Shareholders' Equity Balance at January 1, 2021 S 67,000 S $ Add: Net income Less: Dividends Balance at December 31, 2021 S 67,000 S Current assets Cash Accounts receivable Supplies Inventory Notes receivable Interest receivable Prepaid rent Prepaid insurance Total current assets. Office equipment Accumulated depreciation Total assets Current liabilities PASTINA COMPANY Balance Sheet At December 31, 2021 Assets Liabilities and Shareholders' Equity Accounts payable Salaries payable Notes payable Interest payable Deferred sales revenue Total current liabilities Common stock Retained earnings Total shareholders' equity Total liabilities and shareholders' equity X S 0 0 0 0 0 OO 0 0
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