Problem 3-06 The following are the trial balance and the other information related to Kenneth Consulting Engineer. Credit $817 KENNETH CONSULTING ENGINEER TRIAL BALANCE DECEMBER 31, 2020 Debit Cash $29,500 Accounts Receivable 57,200 Allowance for Doubtful Accounts Supplies 1,500 Prepaid Insurance 1,270 Equipment 29,700 Accumulated Depreciation Equipment Notes Payable Common Stock Retained Earnings Service Revenue Rent Expense 10,621 Salaries and Wages Expense 34,650 Utilities Expenses 1,680 Office Expense 680 $166,801 5,759 7,200 10,000 22,092 120,933 $166,801 1. Fees received in advance from clients $5,580, which were recorded as revenue. 2. Services performed for clients that were not recorded by December 31, $5,193. 3. Bad debt expense for the year is $1,325. 4. Insurance expired during the year $515. 5. Equipment is being depreciated at 10% per year. 6. Kenneth gave the bank a 90-day, 10% note for $7,200 on December 1, 2020. 7. Rent of the building is $817 per month. The rent for 2020 has been paid, as has that for January 2021, and recorded as Rent Expense. 8. Office salaries and wages earned but unpaid December 31, 2020, $2,260. From the trial balance and other information given, prepare annual adjusting entries as of December 31, automatically indented when amount is entered. Do not indent manually. If no entry is require titles and enter o for the amounts.) No. Account Titles and Explanation Debit Credit 1. Service Revenue 5580 | Unearned Service Reve 5580 TAccounts Receivable Service Revenue 5193 3. Bad Debt Expense Allowance for Doubtful 1325 Insurance Expense prepaid Insurance 515 5. Depreciation Expense Accumulated Depreciati 2970 Interest Expense Interest Payable Prepaid Rent Rent Expense 817 Salaries and Wages Expen: Salaries and Wages Pay 2260 SHOW LIST OF ACCOUNTS SHOW SOLUTION Your answer is partially correct. Try again. Prepare an income statement for 2020. (Enter loss using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) KENNETH CONSULTING ENGINEER Income Statement For the Year Ended December 31, 2020 TRevenues Service Revenue TExpenses Rent Expense 9804 Salaries and Wages Exp 36910 Utilities Expenses 1680 T office expense 680 Bad Debt Expense 1325 515 Insurance Expense Depreciation Expense 2970 T Interest Expense T Total Expenses 53944 TNet Income /(Loss) No entry SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Your answer is partially correct. Try again. Prepare a retained earnings statement for 2020. Kenneth paid a $16,310 cash dividend during the year. (recorded in Retained Earnings.) (List items that increase owner's capital first.) KENNETH CONSULTING ENGINEER Statement of Retained Earnings For the Year Ended December 31, 2020 TRetained Earnings, January 1 No entry Net Income / (Loss) 121320 PLess v Dividends No entry TRetained Earnings, December 31 ) 121320 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT KENNETH CONSULTING ENGINEER Balance Sheet December 31, 2020 Assets Current Assets 29500 Cash Accounts Receivable T 62393 Tallowance for Doubtful Acc 2142 60251 Supplies 1500 | Prepaid Insurance 755 T Prepaid Rent 817 Total Current Assets 92823 TEquipment 29700 1. Accumulated Depreciation- 8729 20971) Total Assets til 113794 Liabilities and Owner's Equity Current Liabilities 1 Notes Payable 7200 T Interest Payable 60 T Salaries and Wages Pay 2260 T Unearned Service Reve 5580 15100 Stockholders' Equity Common Stock No entry TRetained Earnings 121320 Total Stockholders' Equity 1213201 T Total Liabilities and Owner's Equity 136420
