Question 6

The following is Ivanhoe Cycle Repair Shop's trial balance at January 31, 2017, the company's fiscal year end:

IVANHOE CYCLE REPAIR SHOP

Trial Balance

January 31, 2017

Debit

Credit

Cash

$3,400

Accounts receivable

6,650

Prepaid insurance

6,420

Supplies

5,240

Land

53,000

Building

190,000Accumulated depreciationbuilding

$11,000

Equipment

27,000

Accumulated depreciationequipment

4,500

Accounts payable

7,300

Unearned revenue

21,970

Mortgage payable

182,200

H. Dude, capital

61,000

H. Dude, drawings

98,100

Service revenue

245,550

Salaries expense

125,200

Utilities expense

12,000

Interest expense

6,510

$533,520

$533,520

Additional information:

1.

The 12-month insurance policy was purchased on June 1, 2016.

2.

A physical count of supplies shows $1,310 on hand on January 31, 2017.

3.

The building has an estimated useful life of 50 years. The equipment has an estimated useful life of 9 years.

4.

The mortgage payable has a 5% interest rate. Interest is paid on the first day of each month for the previous month's interest.5.

By January 31, 2017, $1,300 of the unearned revenue has been earned.

6.

During the next fiscal year, $4,500 of the mortgage payable is to be paid.

Make the adjusting entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,276.)

Date

Account Titles and Explanation

Debit

Credit

Jan. 31

(To record insurance expired)Jan. 31

(To record supplies used)Jan. 31

(To record depreciation)Jan. 31

(To record accrued interest)Jan. 31

(To record revenue for services provided)

Make an adjusted trial balance. (Round answers to 0 decimal places, e.g. 5,276.)

IVANHOE CYCLE REPAIR SHOP

Adjusted Trial Balance

Debit

Credit

$

$

Total$

$

Make an income statement. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

IVANHOE CYCLE REPAIR SHOP

Income Statement

$

$

$

Make a statement of owner's equity. The owner, Henry Dude, invested $5,000 cash in the business on November 17, 2016. (The investment has been recorded and it is included in the capital account). (List items that increase owner's equity first.)

IVANHOE CYCLE REPAIR SHOP

Statement of Owner's Equity

$

:

$

:

$

Make a classified balance sheet. The owner, Henry Dude, invested $5,000 cash in the business on November 17, 2016. (The investment has been recorded and it is included in the capital account). (List Property, Plant and Equipment in order of Land, Buildings and Equipment.)

IVANHOE CYCLE REPAIR SHOP

Balance Sheet

Assets

$

$

$

:

:

$

Liabilities and Owner's Equity

$

$

Make the closing entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,276.)

Date

Account Titles and Explanation

Debit

Credit

Jan. 31

(To close revenue account)Jan. 31

(To close expense accounts)Jan. 31

(To close profit to capital)Jan. 31

(To close drawings account)