P S Plumbing began operations on 1 1 2017 Their annual reporting period ends 12 31 The trial balance on 1 1 2019 follows Account title Debit Credit Cash 6,000 Accounts receivable 6,000 Allowance for uncollectable accounts 1,000 Supplies 13,000 Materials 7,000 Equipment 78,000 Accumulated Depreciation 8,000 Land Accounts payable Wages payable Interest payable Income taxes payable Long term notes payable Common stock (8,000 shares, $0 50 par value 4,000 Additional paid in capital 80,000 Retained earnings 17,000 Service revenue Wages expense Supplies expense Bad debt expense Interest expense Depreciation expense Income tax expense Misc expenses Totals 110,000 110,000 Transaction during 2019 $15,000 cash was borrowed on a five year 8 note payable, dated 3 1 2019 $13,000 cash was paid for land Earned $215,000 in sales revenues for 2019 $52,000 on account and the remainder in cash Issued 4,000 additional shares of common stock for cash at $1 per share on 1 1 2019 Incurred $114,000 in miscellaneous expenses for 2019, $20,000 on credit and the rest paid in cash Collected $34,000 owned on account Purchased materials with $15,000 cash Purchased $27,000 supplies on account Paid $26,000 accounts payable Signed a $12,000 one year service contract for work to begin on 2 1 2020 Declared and paid $25,000 in cash dividends Adjusting entries $18,000 in supplies remained on 12 31 2019 $10,000 depreciation on equipment Interest accrued on notes payable in step a $16,000 in wages earned but will not be paid until 1 3 2020 $11,000 in income taxes for 2019 will be paid in 2020 $2,000 was written off during the year $2,000 of A R is estimated to be uncollectable Hint The AfUA has a $1,000 debit balance after the write offs Required 1) Prepared journal entries for the 2019 and transactions and post them to the ledger 2) Prepared and post the adjusting entries (Adjusted trial balance total debits 404,000) 3)Prepared the Income Statement, Balance sheet, Statement of cash flow, and statement of stockholder's equity in the correct order (Total liabilities and stockholders equity 182,000 ) 4)Journalize and post the closing entries 5)Compute the following ratios for 2019 and explain what you suggest about the company

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

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 25, 2024

P&S Plumbing began operations on 1/1/2017. Their annual reporting period ends 12/31. The trial balance on 1/1/2019 follows: Account title Debit Credit Cash 6,000 Accounts

P&S Plumbing began operations on 1/1/2017. Their annual reporting period ends 12/31. The trial balance on 1/1/2019 follows:

Account title	Debit	Credit
Cash	6,000
Accounts receivable	6,000
Allowance for uncollectable accounts		1,000
Supplies	13,000
Materials	7,000
Equipment	78,000
Accumulated Depreciation		8,000
Land
Accounts payable
Wages payable
Interest payable
Income taxes payable
Long-term notes payable
Common stock (8,000 shares, $0.50 par value		4,000
Additional paid-in capital		80,000
Retained earnings		17,000
Service revenue
Wages expense
Supplies expense
Bad debt expense
Interest expense
Depreciation expense
Income tax expense
Misc. expenses
Totals	110,000	110,000

Transaction during 2019:

$15,000 cash was borrowed on a five-year 8% note payable, dated 3/1/2019.
$13,000 cash was paid for land.
Earned $215,000 in sales revenues for 2019. $52,000 on account and the remainder in cash.
Issued 4,000 additional shares of common stock for cash at $1 per share on 1/1/2019.
Incurred $114,000 in miscellaneous expenses for 2019, $20,000 on credit and the rest paid in cash.
Collected $34,000 owned on account.
Purchased materials with $15,000 cash.
Purchased $27,000 supplies on account.
Paid $26,000 accounts payable.
Signed a $12,000 one-year service contract for work to begin on 2/1/2020.
Declared and paid $25,000 in cash dividends.

Adjusting entries:

$18,000 in supplies remained on 12/31/2019.

$10,000 depreciation on equipment.
Interest accrued on notes payable in step a.
$16,000 in wages earned but will not be paid until 1/3/2020.
$11,000 in income taxes for 2019 will be paid in 2020.
$2,000 was written off during the year.
$2,000 of A/R is estimated to be uncollectable. Hint: The AfUA has a $1,000 debit balance after the write-offs.

Required:

1) Prepared journal entries for the 2019 and transactions and post them to the ledger.

2) Prepared and post the adjusting entries (Adjusted trial balance total debits =404,000)

3)Prepared the Income Statement, Balance sheet, Statement of cash flow, and statement of stockholder's equity in the correct order (Total liabilities and stockholders equity = 182,000 )

4)Journalize and post the closing entries.

5)Compute the following ratios for 2019 and explain what you suggest about the company.