Question 1 : Accounting Cycle

Mike Brudu began operations on January 1, 2017. The trial balance columns for the Quarter Ended March 31, 2017 shown below:

Cash

Accounts Receivable

Supplies

Prepaid Insurance Equipment

Notes Payable

Accounts Payable

Owners Capital

Owners Drawings

Service Revenue

Salaries and Wages Expense Travel Expense

Rent Expense Miscellaneous Expense

Other data:

1. Supplies on hand total $480.

Dr. Cr. 11,400

5,620

1,050

2,400 30,000

600

13,620

2,200 1,300

1,200

200

55,970 55,970

2. Depreciation is $800 per quarter.

3. Interest accrued on 6-month note payable, issued January 1, $300.

4. Insurance expires at the rate of $200 per month.

5. Services performed but unbilled at March 31 total $1,030.

10,000 12,350 20,000

Instructions

(a) Prepare an income statement and owners equity statement for the quarter and a classified balance sheet at March 31. M. Brudu did not make any additional investments in the business during the quarter ended March 31, 2017.

(b) Journalize the adjusting entries.

(c) Prepare adjusted trial balance

(d) Journalize the closing entries

(e) Prepare post-closing trial balance

(f) Prepare the Income statement and owners equity Statement and classified balance sheet

at March 31.