Problem 3-5B

Salanes UADUITS .... Wages expense ... Interest expense ... Office supplies expense. Advertising expense... Repairs expense --Trucks 300,000 15,000 31,000 27,200 35,600 $1,530,800 $1,530,800 Totals..... Check Total assets, $663,000 Required Use the information in the adjusted trial balance to prepare (a) the income statement for the year ended December 31; (b) the statement of retained earnings for the year ended December 31 (Note: Retained Earnings at Dec 31 of the prior year was $110,000); and (c) the balance sheet as of December 31. Problem 3-5B Applying the accounting cycle P1 P2 P3 P4 P5 P6 P7 P8 On July 1, Lula Plume created a new self-storage business, Safe Storage Co. The following transactions occurred during the company's first month. July 1 Plume invested $30,000 cash and buildings worth $150,000 in the company in exchange for common stock 2 The company rented equipment by paying $2,000 cash for the first month's (July) rent. 5 The company purchased $2,400 of office supplies for cash. 10 The company paid $7,200 cash for the premium on a 12-month insurance policy. Coverage begins on July 11. 14 The company paid an employee $1,000 cash for two weeks' salary earned 24 The company collected $9,800 cash for storage fees from customers. 28 The company paid $1,000 cash for two weeks' salary earned by an employee. 29 The company paid $950 cash for minor repairs to a leaking roof. 30 The company paid $400 cash for this month's telephone bill. 31 The company paid $2,000 cash in dividends. The company's chart of accounts follows. 101 Cash 106 Accounts Receivable 124 Office Supplies 128 Prepaid Insurance 173 Buildings 174 Accumulated Depreciation-Buildings 209 Salaries Payable 307 Common Stock 318 Retained Earnings 319 Dividends 401 Storage Fees Earned 606 Depreciation Expense Buildings 622 Salaries Expense 637 insurance Expense 640 Rent Experise 650 Office Supplies Expense 684 Repairs Experise 688 Telephone Expense same Summary 901 Income Summa Financial and Managerial Accounting: Information for Decisions, Eighth Edition 149 Chapter 3 Adjusting Accounts for Financial Statements 137 Required 1. Use the balance column format to set up each ledger account listed in its chart of accounts. 2. Prepare journal entries to record the transactions for July and post them to the ledger accounts. Record prepaid and unearned items in balance sheet accounts. 3. Prepare an unadjusted trial balance as of July 31. Check (3) Unadj. trial 4. Use the following information to journalize and post adjusting entries for the month: balance totals, $189,800 a. Prepaid insurance of $400 has expired this month. (40) Dr. Insurance Expense, b. At the end of the month, $1,525 of office supplies are still available. $400 c. This month's depreciation on the buildings is $1,500. d. An employee earned $100 of unpaid and unrecorded salary as of month-end. e. The company earned $1,150 of storage fees that are not yet billed at month-end. 5. Prepare the adjusted trial balance as of July 31. Prepare the income statement and the statement of (5) Net income $2,725; Total retained earnings for the month of July and the balance sheet at July 31. assets, $180,825 6. Prepare journal entries to close the temporary accounts and post these entries to the ledger. (7) P-C trial balance totals, 7. Prepare a post-closing trial balance. $182,325 The adjusted trial balance for Anara Co, as of December 31, 2019, follows. P. Anara invested $40,000 cash in the business in exchange for common stock during year 2019. The December 31, 2018, credit bal- ance of the Retained Earnings account was $52,800. Problem 3-6B Preparing closing entries and financial statements P6 P7 Adjusted Trial Balance December 31, 2019 Account Title Debit Credit No. $ 101 104 126 128 167 168 Cash ........... Short-term Investments .... Supplies ........ Prepaid insurance .... Equipment..... Accumulated depreciation-Equipment. 7,400 11,200 4,600 1,000 24,000 $ 4,000 100.000