Twinkle Corporation adjusts its account monthly and closes its accounts annually. The following is unadjusted trial balance of Twinkle Corporation on 31 December 2017:

Adjusting items:

1. Supplies on hand on 31 December 2017 amounted to $36,000.

2. The company received $3,000 cash in advance for provision of service in February 2018. No entries have been made.

Required:

a) Prepare Journal entries for adjusting items.

b) Prepare Income Statement for the year ended 31 December 2017, and Statement of Financial Position as at that date.

Supplementary Exercise - Chapter 5 Twinkle Corporation adjusts its account monthly and closes its accounts annually. The following is unadjusted trial balance of Twinkle Corporation on 31 December 2017: Debit Credit $ 6,723 190 18,910 38,000 45,000 25,000 100,000 Cash Prepaid office expense Accounts receivable Supplies Equipment Accumulated depreciation - equipment Building Rent payable Accounts payable Shares capital Retained earnings Dividends Revenue earned Salaries expense Rental expense Office expense Supplies expense Depreciation expense Income tax expense 280 12,304 100,000 33,652 4,000 90,000 18,310 4,515 2.832 11,860 9,000 1,896 261,236 261,236 Adjusting items: 1. Supplies on hand on 31 December 2017 amounted to $36,000. 2. The company received $3,000 cash in advance for provision of service in February 2018. No entries have been made. Required: a) Prepare Journal entries for adjusting items. b) Prepare Income Statement for the year ended 31 December 2017, and Statement of Financial Position as at that date