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Problem 1 FlooriFy Corp. delivers flooring design consulting services. The company performs adjusting entries on a monthly basis, whereas closing entries are prepared annually at
Problem 1 FlooriFy Corp. delivers flooring design consulting services. The company performs adjusting entries on a monthly basis, whereas closing entries are prepared annually at December 31. An unadjusted trial balance dated December 31, current year, follows. Floorify Undjusted trial balance December 31st 2020 Cash 2.500 Accounts Receivable 5.500 Prepaid rent 2.500 Unexpired insurance policies 2.000 Office supplies 650 Office Equipment 160.000 Building 295.000 Acc depreciation Building 40.625 Acc Depreciation Office Equipment 20.313 Ac. Payable 1.000 Notes Payable due 3/1 year 2 130.000 Income tax payable 1.000 Unearned fees 1.200 Salaries payable 7.000 Interest payable 5.500 Capital stock 35.000 Retained Earnings 106.225 Dividends 15.000 Sales 950.000 Telephone expense 10.000 Office supply expense 22.000 Depreciation expense office equipment 17.188 Depreciation expense building 34.375 Rent expense 12.000 Insurance expense 11.000 Salary expense 700.000 Income tax expense 1.000 interest expense 7.150 Totals 1.297.863 1.297.863. By the end of December 2020, Marc Douros, chief accountant of FlooriFy Corp is working to finish his accounting for the month. He realizes that he still needs to prepare the adjusting entries, and he has the following information: 1. Salaries earned by employees that have not yet been recorded or paid amount to 90,000. 2. Depreciation of the Office Equipment equipment is based on an estimated life of 9 years. The straight-line method is used. Depreciation of the Building is based on an estimated life of 35 years. The straight-line method is used. 3. The company signed an insurance contract by February 1st 2020 for one year, with a value of 12,000. 4. A 11-month note payable in the amount of 130,000 had been obtained with an interest computed at an annual rate of 6 percent on March 1st 2020. The entire 130,000, plus all of the interest accrued over the 14-month life of the loan, is due in full on February 1st of the upcoming year. 5.- Unrecorded Income Taxes Expense accrued in December amounts to 25% of Earnings before taxes (17195). This amount will not be paid until March 30. 6.- The company has just signed a new 20,000 contract for next year services with customer RPT corp, and collected a 20% of the amount. 7.- By December 31st the company has just sold the building for 280,000 cash. Prepare adjusting entries on General Journal format. Problem 2 Prepare an after-adjusting entries trial balance. (2 Prepare an income statement for the year ended December 31, current year. Prepare an after closing Balance Sheet. Briefly evaluate the companys profitability and liquidity. (10 points)
Problem 1
FlooriFy Corp. delivers flooring design consulting services. The company performs adjusting entries on a monthly basis, whereas closing entries are prepared annually at December 31. An unadjusted trial balance dated December 31, current year, follows.
Floorify
Undjusted trial balance December 31st 2020
Cash 2.500
Accounts Receivable 5.500
Prepaid rent 2.500
Unexpired insurance policies 2.000
Office supplies 650
Office Equipment 160.000
Building 295.000
Acc depreciation Building 40.625
Acc Depreciation Office Equipment 20.313
Ac. Payable 1.000
Notes Payable due 3/1 year 2 130.000
Income tax payable 1.000
Unearned fees 1.200
Salaries payable 7.000
Interest payable 5.500
Capital stock 35.000
Retained Earnings 106.225
Dividends 15.000
Sales 950.000
Telephone expense 10.000
Office supply expense 22.000
Depreciation expense office equipment 17.188
Depreciation expense building 34.375
Rent expense 12.000
Insurance expense 11.000
Salary expense 700.000
Income tax expense 1.000
interest expense 7.150
Totals 1.297.863 1.297.863. By the end of December 2020, Marc Douros, chief accountant of FlooriFy Corp is working to finish his accounting for the month. He realizes that he still needs to prepare the adjusting entries, and he has the following information:
1. Salaries earned by employees that have not yet been recorded or paid amount to 90,000.
2. Depreciation of the Office Equipment equipment is based on an estimated life of 9 years. The straight-line method is used. Depreciation of the Building is based on an estimated life of 35 years. The straight-line method is used.
3. The company signed an insurance contract by February 1st 2020 for one year, with a value of 12,000.
4. A 11-month note payable in the amount of 130,000 had been obtained with an interest computed at an annual rate of 6 percent on March 1st 2020. The entire 130,000, plus all of the interest accrued over the 14-month life of the loan, is due in full on February 1st of the upcoming year.
5.- Unrecorded Income Taxes Expense accrued in December amounts to 25% of Earnings before taxes (17195). This amount will not be paid until March 30.
6.- The company has just signed a new 20,000 contract for next year services with customer RPT corp, and collected a 20% of the amount.
7.- By December 31st the company has just sold the building for 280,000 cash.
Prepare adjusting entries on General Journal format.
Problem 2
Prepare an after-adjusting entries trial balance. (2
Prepare an income statement for the year ended December 31, current year.
Prepare an after closing Balance Sheet.
Briefly evaluate the companys profitability and liquidity. (10 points)
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