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The trial balance before adjustment on December 31, 2015 of Paul Financial Planners appears below: PAUL FINANCIAL PLANNERS Unadjusted Trial Balance December 31, 2015
The trial balance before adjustment on December 31, 2015 of Paul Financial Planners appears below: PAUL FINANCIAL PLANNERS Unadjusted Trial Balance December 31, 2015 Cash Accounts Receivable Prepaid Insurance. Supplies Equipment Accumulated Depreciation-Equipment. Accounts Payable Unearned Service Revenue Common Stock....... Debit Credit $15,000 2,200 6,000 1,800 26,000 $ 4,000 3,000 5,000 10,000 Retained Earnings 3,000 Mortgage Payable.. 24,000 Salaries and Wages Expense Dividends. 4,000 3,500 Service Revenue Advertising Expense Depreciation Expense Rent Expense 15,000 1,100 2,500 1.900 $64.000 $84.000 Page 2 QUESTION 1 (Cont'd) Other data: 1. Insurance expires at the rate of $500 per month 2. A count of supplies shows $1,000 of unused supplies on December 31, 2015. 3. A utility bill for $1,000 has not been recorded and will not be paid until next month. 4. Invoices representing $5,000 of services performed during the month have not been recorded as of December 31, 2015. 5. The mortgage interest rate is 10% per annum. (The mortgage was taken out on December 1. 2015 and is due to be repaid by 2020). Required: a. Prepare adjusting entries for the month of December 2015. (5 marks) b. Prepare an income statement for the month ending December 31, 2015. (10 marks) c. Prepare a retained earnings statement for the month ending December 31, 2015. (5 marks) d. Prepare a classified balance sheet at December 31, 2015. (15 marks)
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