Record Transactions 1-7

Prepare the unadjusted trial balance

Project Information Smith Consulting Company started the period with cash of $65,000, common stock of $25,000, and retained earnings of $40,000. Smith engaged in the following transactions in 2020: Transactions during 2020 1. On January 1, 2020, purchased office furniture for $22,000 on account. The office furniture will be paid quarterly in equal amounts. 2. on March 3, paid $10,800 for an insurance policy that provides coverage for 12 months beginning immediately 3. On March 10, hired four employees who will begin working on June 1. Jon March 15, purchased $2,000 of supplies for cash. 5. On April 1, received $14,000 for services that will be performed over the next 12 months beginnin immediately 6. On June 10, provided $36,000 of services for cash. 7 on June 15, paid $9,200 for salaries expense. Information for Adjusting Entries 8. The furniture had an estimated life of five years and a $2,000 salvage value. 9. Recognized the expired insurance. 10. An inventory of supplies showed $750 of supplies on hand as of December 31. 11. Recognized the revenue associated with Event 5 as of December 31. Chart of Accounts 100 Cash 104 Accounts receivable 108 Prepaid insurance 112 Supplies 116 Office furniture 114 Accumulated depreciation 200 Accounts payable 204 Wages payable 212 Taxes payable 218 Unearned revenue 300 Common stock 320 Retained earnings 400 Service revenue 900 Salaries expense 904 Depreciation expense 908 Insurance expense 910 Supplies expense 1. In journal entry form, record the transactions that occurred during 2020, items 1 through 7. 2. Prepared the unadjusted trial balance 3. In journal entry form, record the adjusting entries, items 8 through 11. 4. Prepare the Income Statement, in good form. 5. Prepare the Balance Sheet, in good form. 6. Prepare the Statement of Cash Flows, in good form. Use the information from the financial statements to calculate the following ratios: 1. Debt ratio 2. Profit margin 3. Current ratio