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Item4

Item 4 10 points

Karla Tanner opened a web consulting business called Linkworks and recorded the following transactions in its first month of operations.

Apr.		1		Tanner invests $80,000 cash along with office equipment valued at $26,000 in the company in exchange for common stock.
Apr.		2		The company prepaid $9,000 cash for twelve months rent for office space. The company's policy is record prepaid expenses in balance sheet accounts.
Apr.		3		The company made credit purchases for $8,000 in office equipment and $3,600 in office supplies. Payment is due within 10 days.
Apr.		6		The company completed services for a client and immediately received $4,000 cash.
Apr.		9		The company completed a $6,000 project for a client, who must pay within 30 days.
Apr.		13		The company paid $11,600 cash to settle the account payable created on April 3.
Apr.		19		The company paid $2,400 cash for the premium on a 12-month insurance policy. The company's policy is record prepaid expenses in balance sheet accounts.
Apr.		22		The company received $4,400 cash as partial payment for the work completed on April 9.
Apr.		25		The company completed work for another client for $2,890 on credit.
Apr.		28		The company paid $5,500 cash in dividends.
Apr.		29		The company purchased $600 of additional office supplies on credit.
Apr.		30		The company paid $435 cash for this months utility bill.

Descriptions of items that require adjusting entries on April 30, 2017, follow.

• a) On April 2, the company prepaid $9,000 cash for twelve months' rent for office space.

• b) The balance in Prepaid insurance represents the premium paid for a 12-month insurance policy the policy's coverage began on April 1.

• c) Office supplies on hand as of April 30 total $1,200.

• d) Straight-line depreciation of office equipment, based on a 5-year life and a $4,000 salvage value, is $500 per month.

• e) The company has completed work for a client, but has not yet billed the $1,800 fee.

• f) Wages due to employees, but not yet paid, as of April 30 total $2,600.

4 ASSETS Current assets: Cash 59,465 Accounts receivable 6,290 ints Office supplies 1,200 Prepaid insurance 2,200 Prepaid rent 8,250 $ 77,405 Total current assets Plant assets: Office equipment 34,000 0 Accumulated depreciation - Office equipment Office equipment, net 34,000 111,405 Total assets LIABILITIES AND EQUITY Liabilities: Accounts payable 600 Wages payable 2,600 C 3,200 Total liabilities Equity: Common stock 106,000 Retained earnings 2,205 Total equity 108,205 Total liabilities and equity 111,405 Impact on General General Income St Retained Trial Balance Balance Sheet Requirement Journal Ledger Statement Earnings Income For each adjustment, indicate the income statement and balance sheet account affected, and the impact on net income. If an adjustment caused net income to decrease, enter the amount as a negative value. Net income before adjustments can be found on the income statement tab. (Hint: Select unadjusted on the drop-down.) Show lesSA: Adjusted Account affecting the: Impact on net income Adjusting entry related to: Income Statement Balance Sheet a) Rent Prepaid rent (750) Rent expense Prepaid insurance (200) b) Insurance Insurance expense Office supplies Accumulated depreciation - Office equipment Accounts receivable c) Office supplies Office supplies expense Depreciation expense - Office equipment (3,000) (500) d) Depreciation 1,800 e) Unbilled fees Services revenue (2,600) Wages expense fUnpaid wages Wages payable Total impact on income due to adjustments Net income before adjustments Net income after adjustments (5,250) 3,450 (1,800) (291.7)% Had the adjustments not been prepared, income would have been overstated by