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 32,000 Accounts receivable 40,600 Supplies 1,800 Inventory 60,600 Notes receivable 20,600 Interest receivable 0 Prepaid rent 1,200 Prepaid insurance 6,600 Office equipment 82,400 Accumulated depreciation 30,900 Accounts payable 31,600 Salaries payable 0 Notes payable 50,600 Interest payable 0 Deferred sales revenue 2,300 Common stock 64,200 Retained earnings 30,000 Dividends 4,600 Sales revenue 149,000 Interest revenue 0 Cost of goods sold 73,000 Salaries expense 19,200 Rent expense 11,300 Depreciation expense 0 Interest expense 0 Supplies expense 1,400 Insurance expense 0 Advertising expense 3,300 Totals 358,600 358,600 Information necessary to prepare the year end adjusting entries appears below Depreciation on the office equipment for the year is $10,300 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 $900 On October 1, 2021, Pastina borrowed $50,600 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 On March 1, 2021, the company lent a supplier $20,600 and a note was signed requiring principal and interest at 8 to be paid on February 28, 2022 On April 1, 2021, the company paid an insurance company $6,600 for a one year fire insurance policy The entire $6,600 was debited to prepaid insurance $560 of supplies remained on hand at December 31, 2021 A customer paid Pastina $2,300 in December for 900 pounds of spaghetti to be delivered in January 2022 Pastina credited deferred sales revenue On December 1, 2021, $1,200 rent was paid to the owner of the building The payment represented rent for December 2021 and January 2022 at $600 per month The entire amount was debited to prepaid rent Problem 2 4 (Algo) Part 4 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 $4,600 in cash dividends were paid to shareholders during the year

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 07, 2024

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	32,000
Accounts receivable	40,600
Supplies	1,800
Inventory	60,600
Notes receivable	20,600
Interest receivable	0
Prepaid rent	1,200
Prepaid insurance	6,600
Office equipment	82,400
Accumulated depreciation		30,900
Accounts payable		31,600
Salaries payable		0
Notes payable		50,600
Interest payable		0
Deferred sales revenue		2,300
Common stock		64,200
Retained earnings		30,000
Dividends	4,600
Sales revenue		149,000
Interest revenue		0
Cost of goods sold	73,000
Salaries expense	19,200
Rent expense	11,300
Depreciation expense	0
Interest expense	0
Supplies expense	1,400
Insurance expense	0
Advertising expense	3,300
Totals	358,600	358,600

Information necessary to prepare the year-end adjusting entries appears below.

Depreciation on the office equipment for the year is $10,300.
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 $900.
On October 1, 2021, Pastina borrowed $50,600 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.
On March 1, 2021, the company lent a supplier $20,600 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2022.
On April 1, 2021, the company paid an insurance company $6,600 for a one-year fire insurance policy. The entire $6,600 was debited to prepaid insurance.
$560 of supplies remained on hand at December 31, 2021.
A customer paid Pastina $2,300 in December for 900 pounds of spaghetti to be delivered in January 2022. Pastina credited deferred sales revenue.
On December 1, 2021, $1,200 rent was paid to the owner of the building. The payment represented rent for December 2021 and January 2022 at $600 per month. The entire amount was debited to prepaid rent.

Problem 2-4 (Algo) Part 4

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 $4,600 in cash dividends were paid to shareholders during the year.