Question 1 (18 Marks) Mike's Fencing Inc. is a fencing company that builds fences for customers specializing in building fences in new construction neighborhoods. The company's unadjusted trial balance includes the following account balances: Mike's Fencing Inc. UNADJUSTED TRIAL BALANCE December 31, 2019 Debit Account Credit $68,900 116,300 1,300 138,600 8,700 50,000 277,800 Cash Accounts receivable Interest receivable Supplies Prepaid insurance Notes receivable Property and equipment Accumulated depreciation Accounts payable Accrued liabilities Deferred revenue Notes payable Contributed capital Retained earnings Service revenue vicepov Intereserevenue Rent expense Supplies expense Depreciation expense Utilities expense Wages expense Insurance expense Totals $64,500 104,100 21,600 9,200 87,400 216,100 143,500 40,500 21,900 26,400 0 0 3,000 17,800 0 $708,800 $708,800 Requirement B Income Statement respond below: The company purchased a new insurance policy for $8,700 on January 1, 2019 that will insure the company for 2 years. The company correctly calculated depreciation of $8,150 for the year. When a count of supplies in the shed was done at December 31, 2019, it was determined there was $85,700 left of supplies on hand. Finally, Interest earned on the outstanding notes receivable is $260 for the year and the company will receive the interest in cash on February 28, 2020. Requirements: A) Prepare any required adjusting journal entries that should be recorded. Ignore the effect of income taxes B) Prepare the Income Statement for the year-ended December 31, 2019 for Mike's Fencing Inc. in good format (do not create a multi-step income statement, just a single step, simple, income statement). Ignore the effect of income taxes. Requirement A Journal Entries - respond below: 2) 3 Requirement B Income Statement - respond below: words D English (Canada) ype here to search a Question 2 (6 Marks - 1 Mark Each) Insert the appropriate letter into the correct blank to describe the type of adjustment required at the end of April and the effect it has on expenses or revenues and assets or liabilities. Effect on Account (A, B, C or D) A. Revenue rises and asset rises. B. Expense rises and asset falls. C. Revenue rises and liability falls. D. Expense rises and liability rises. Effect on Account? (A, B, COD) 1. The Grass is Greener Company has $8,300 in prepaid rent at the beginning of April and uses $3,600 of that for its April rent 2. The Grass is Greener Company provides lawn care in April for customers who will be billed and will pay in May. 3. The Grass is Greener Company owes interest on loans for the month of April and will not pay this interest until May. 4. The Grass is Greener Company uses $1,600 worth of Fertilizer from its stock of supplies. 5. The Grass is Greener Company provides lawn care in April for customers who paid in March 6. The company pays tax at a rate of 20% and taxes are paid 2 months after year-end
