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South Bend Repair Service Company keeps its records without the help of an accountant. After much effort, an outside accountant prepared the following unadjusted
South Bend Repair Service Company keeps its records without the help of an accountant. After much effort, an outside accountant prepared the following unadjusted trial balance as of the end of the annual accounting period on December 31: Cash Accounts receivable Supplies Prepaid insurance. Equipment Accumulated depreciation Other assets Accounts payable Wages payable Income taxes payable SOUTH BEND REPAIR SERVICE COMPANY Unadjusted Trial Balance For the Year Ended December 31 Note payable (two years; 12% interest due each December 31). Common stock (4,000 shares outstanding all year). Additional paid-in capital Retained earnings Service revenue Wages expense Remaining expenses (not detailed; excludes income tax) Income tax expense Totals Data not yet recorded at December 31 of the current year include: a. Depreciation expense for the current year, $4,900. b. Insurance expired during the current year, $1,400. Debit 21,500 Credit 8, 900 3, 200 2,800 28, 900 13, 900 7,000 4, 400 7,000 490 17, 600 8, 110 57,500 27, 100 9, 600 109,000 109,000 c. Wages earned by employees but not yet paid on December 31 of the current year, $4,000. d. The supplies count at the end of the current year reflected $2,200 in remaining supplies on hand to be used in the next year. e. Seven months of interest expense (on the note payable borrowed on June 1 of the current year) was incurred in the current year. f. Income tax expense was $3,314. 2-a. Prepare an income statement (with Operating Income and Other Items sections, and earnings per share) for the current year to include the effects of the preceding six transactions. 2-b. Prepare a classified balance sheet for the current year to include the effects of the preceding six transactions.
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