The following trial balance of Lazy Corporation dated December 31, 20X1, developed by a clerk, contains errors.
					Trial Balance
Accounts					Debits	Credits
Cash					$4,700
Trade receivables						$3,500
Machine					8,300
Accumulated depreciation, machine					500
Trade payables					3,000
Share capital						10,000
Retained earnings						3,000
Totals					$16,500	$16,500
Your Answer
	list corrected Trial Balance.
						Trial Balance
	Accounts					Debits	Credits
	Cash					$	$
	Trade receivables
	Machine
	Accumulated depreciation, machine
	Trade payables
	Share capital
	Retained earnings
	Totals					$	$

Question 2 - 8 marks

Your Answers:

Below are four transactions that were completed during 20X1 by Doby Company. The annual accounting period ends on December 31.

Each transaction will require an adjusting entry at December 31, 20X1. You are to provide the 20X1 adjusting entries required for Doby Company.

A. On July 1, 20X1, Doby Company paid a two-year insurance premium for a policy on its equipment. This transaction was recorded as follows:

A.

December 31, 20X1--Adjusting entry:

July 1, 20X1:

Prepaid insurance

$1,000

Cash

$1,000

B. On December 31, 20X1 a tenant renting some office space from Doby Company had not paid the rent of $500 for December.

B.

December 31, 20X1--Adjusting entry:

C. On September 1, 20X1, Doby Company borrowed $3,000 cash and gave a one-year, 10 percent, note payable. The total interest of $300 is payable on the due date,

August 31, 20X2. The note was recorded as follows:

C.

December 31, 20X1--Adjusting entry:

September 1, 20X1:

Cash

$3,000

Note payable

$3,000

D. Assume Doby Company publishes a magazine. On October 1, 20X1, the company collected $440 for subscriptions two years in advance.

D.

December 31, 20X1--Adjusting entry:

The $440 collection was recorded as follows:

October 1, 20X1:

Cash

$440

Unearned subscription revenues

440

Question 3 - 15 marks

Xiang Insurance Agency Ltd. prepares monthly financial statements. Presented below is an income statement prepared for the month of July 20x8.

XIANG INSURANCE AGENCY LTD.

Income Statement

Month Ended July 31, 20x8

Revenues

Commission revenue

$60,000

Expenses

Salaries expense

$5,000

Advertising expense

800

Rent expense

4,200

Depreciation expense

2,800

Total expenses

12,800

Income before income tax

47,200

Income tax expense

0

Net income

$47,200

When the income statement was prepared, the company accountant forgot to take into consideration the following information:

1

A utility bill for $800 was received on the last day of the month for electric and gas service for the month of July.

2

The company sold a life insurance policy on July 20 to a client for a premium of $28,000.

The agency billed the client for the policy and is entitled to a commission of 15%.

3

Supplies on hand at the beginning of the month were $700. The agency purchased additional supplies

during the month for $2,500 in cash and $2,200 of supplies were on hand at July 31.

4

The agency purchased a used car at the beginning of July for $16,800 cash. The estimated useful life of the car is 4 years.

5

The agency pays its employees each Friday. Weekly payroll (5 days) is $7,200. July 31 falls on a Tuesday.

6

Estimated income tax expense owing was $10,000.

Instructions

List corrected income statement.

The adjusted trial balance of Ward Company at the end of the accounting year, December 31, 20X2, showed the following:

Adjusted Trial Balance

Account Titles

Debits

Credits

Cash

$20,000

Machinery

90,000

Accumulated Depreciation

16,000

Trade Payables

7,000

Share Capital

20,000

Retained Earnings

59,000

Service Revenue

40,000

Interest Expense

4,000

Operating Expenses

17,000

Depreciation Expense

8,000

Dividends declared and paid

3,000

Totals

$142,000

$142,000

1) Give all the required closing entries for Ward Company at December 31, 20X2. (You need not use the Income Summary account).

2) The 20X2 ending balance in retained earnings was $ ________

Required

1) list all of the closing entries for Ward company at December 31, 20x2

2) The 20x2 ending balanc ein retained earnings would be how much?