Question
The following selected accounts appeared in the unadjusted trial balance of Hawthorne Industries: - Accounts Receivable $176,000 Prepaid Rent 69,000 Prepaid Insurance 36,000 Equipment 280,000
- The following selected accounts appeared in the unadjusted trial balance of Hawthorne Industries: -
Accounts Receivable | $176,000 |
Prepaid Rent | 69,000 |
Prepaid Insurance | 36,000 |
Equipment | 280,000 |
Accumulated depreciation - equipment | 30,000 |
Unearned Service Revenue | 24,000 |
Salary Expense | 130,000 |
Additional data:
- One-half of the revenue received in advance has been earned by December 31, 2019
- The prepaid insurance represents three years premium on a policy providing coverage starting September 1, 2019
- Since the last payday, employees have earned an additional $2,500 which has not yet been paid or recorded
- The equipment has an estimated life of 10 years and no expected value at the end of its life
- Services performed but unbilled and uncollected at year end amounted to $6,500
- The prepaid rent relates to one-half of the year beginning on October 1, 2019
Prepare the necessary year-end adjusting entries as of December 31, 2019.
- The unadjusted trial balance and information regarding adjusting entries for Beckys Carpets, Inc., is given below. Prepare the financial statements for Beckys Carpet Inc., after making the necessary adjustments
Beckys Carpets, Inc.,
Unadjusted Trial Balance
December 31, 2019
Accounts | Debit | Credit |
| 25,500 |
|
Accounts receivable | 15,000 |
|
Supplies | 4,500 |
|
Prepaid Insurance | 5,000 |
|
Equipment | 89,000 |
|
Accumulated depreciation - Equipment |
| 6,000 |
Accounts payable |
| 1,800 |
Unearned service revenue |
| 3,700 |
Common stock |
| 93,200 |
Retained earnings |
| 21,000 |
Service revenue |
| 30,700 |
Salary expense | 15,700 |
|
Advertising expense | 1,700 |
|
| 156,400 | 156,400 |
Adjusting entry information:
- Salaries earned but unpaid at the end of the year, $1,500
- Insurance expired, 700
- Depreciation expense, 800
- Unearned service revenue earned during the year, $1,500
- The inventory of supplies at year end was $3,400
- Galarus company had the following trial balance as of December 31, 2019
Galarus Company
Trial Balance
December 31, 2019
Accounts | Debit | Credit |
| 10,600 |
|
Accounts receivable | 13,200 |
|
Supplies | 2,400 |
|
Prepaid Insurance | 1,500 |
|
Equipment | 38,500 |
|
Accumulated depreciation - Equipment |
| 8,300 |
Accounts payable |
| 2,500 |
Unearned service revenue |
| 8,900 |
Common stock |
| 15,000 |
Retained earnings |
| 10,100 |
Service revenue |
| 35,000 |
Salary expense | 11,200 |
|
Advertising expense | 2,400 |
|
| 79,800 | 79,800 |
Additional information:
- Supplies used during the month, $450
- Prepaid insurance expired during the month, $300
- Depreciation on equipment for the month, $550
- Unearned service revenue earned during the month, $2,200
- Accrued salary expense at the end of the month, $650
Based on the trial balance and the additional data, prepare financial statements for the year ended December 31, 2019
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