Question 2

Financial information for the year ending December 31 2020 for Grace Company is provided in the second tab in the excel file called Assignment 2 General Ledger. The books are only closed at the end of the year (meaning items such as depreciation are only posted at year end). The following items have yet to be reflected in the General Ledge:

Assets

=

Liabilities

+

Shareholder Equity

Retained Earnings

Transaction

Cash

Accounts Receivable

Prepaid Expenses

Interest Receivable

Note Receivable

Building

Accumlated Depreciation Building

Accruals Payable + Other Accruals payable

Wages Payable

Deferred Revenue

Capital Stock

Retained Earnings

Revenues

Wages Expense

Interest and Bank Expenses

Other Expenses

Proof

DR

DR

DR

DR

DR

DR

CR

CR

CR

CR

CR

CR

CR

DR

DR

DR

Balance Dec 31

20,000

-

4,200

12,000

30,000

2,000

9,200

700

3,600

2,000

35,710

25,700

8,700

540

3,470

(21,420)

Other information:

1. The Note Receivable was issued on April 1^st 2020. Interest of 15% per year and principal are due on March 31 2021.
2. Depreciation for the year for the building is $850.
3. The bank statement was received in early January of the following year. The bank statement showed items that were not reflected in the General Ledger:
   1. A cheque was returned for $500. This related to a sale. It is most likely that this amount will be collected in the near future.
   2. The bank charged $20 in service charges for the month of December.
   3. A cheque to pay an accounts payable in the amount $450 was incorrect posted as $540
4. The $4,200 in the Prepaid Expense represents a transaction posted on November 1 for the prepayment of rent for November, December and January.
5. The $3,600 in Deferred Revenues represents funds received in November for work performed in December ($1,100) and work to be performed in January ($2,500)
6. The $700 in Wages payable was posted in December 31 2019 for wages incurred in 2019 but paid in 2020.
7. $1,000 in wages was paid on January 5, 2021: $400 related to December 2020 and $600 for January 2021
8. A $260 invoice was received on January 21 2021 for Hydro the period December 15 2020 to January 15 2021

Required

In the file provided Assignment 3 General Ledger, record each of the transactions as they relate to the year ended December 31, 2020.

Prepare an Income Statement and Balance Sheet.