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Unadjusted trial balance Dialog content starts Hudson Bay Research Unadjusted Trial Balance April 30, 2020 Balance Account Title Debit Credit Cash $38,000 Accounts receivable 40,000

Unadjusted trial balance

Dialog content starts

Hudson Bay Research

Unadjusted Trial Balance

April 30, 2020

Balance

Account Title

Debit

Credit

Cash

$38,000

Accounts receivable

40,000

Prepaid rent

18,000

Supplies

3,800

Furniture

78,000

Accumulated amortizationfurniture

$13,800

Accounts payable

20,000

Salaries payable

0

J. Shaw, capital

179,800

J. Shaw, withdrawals

48,000

Consulting revenue

127,000

Salaries expense

44,000

Rent expense

37,000

Utilities expense

26,000

Amortization expensefurniture

7,800

Supplies expense

0

Total

$340,600

$340,600

Accrued consulting revenue at

April

30,

$4,000.

b.

The prepaid balance of

$18,000

represented one year of rent. Four months of prepaid rent have been used.

c.

Supplies remaining on hand at

April

30,

$980.

d.

The estimated useful life of the furniture is 10 years; it will have no value at the end of 10 years, and the straight-line method of amortization is used. Amortization expense had only been taken for the first 11 months.

e.

Accrued salaries expense at

April

30

is for three days. The five-day weekly payroll is

$7,000.

Requirement 1. Prepare the adjusted trial balance of

Hudson Bay

Research at

April

30,

2020

by sketching T-accounts in your notes to calculate the new balances.

Complete the adjusted trial balance. Remember to consider the adjustments provided in the problem. (Round all adjustments to the nearest whole dollar. If a box is not used in the adjusted trial balance, leave the box empty; do not enter a zero.)

Hudson Bay Research

Adjusted Trial Balance

April 30, 2020

Balance

Account Title

Debit

Credit

Cash

Accounts receivable

Prepaid rent

Supplies

Furniture

Accumulated amortizationfurniture

Accounts payable

Salaries payable

J. Shaw, capital

J. Shaw, withdrawals

Consulting revenue

Salaries expense

Rent expense

Utilities expense

Amortization expensefurniture

Supplies expense

Total

Requirement 2. Prepare the income statement and the statement of owner's equity for the year ended

April

30,

2020,

and the balance sheet at

April

30,

2020.

Write a short description of how the three financial statements are linked.

Begin with the income statement.

Revenue:

Expenses:

Total expenses

Net income

Next, prepare the statement of owner's equity.

Add:

Less:

Finally, prepare the balance sheet. Begin with the heading, and then complete the body of the statement.

Assets

Liabilities

Total liabilities

Owner's Equity

Total assets

Total liabilities and owner's equity

Write a short description of how the three financial statements are linked.

Expenses

Net income (or net loss)

Revenue

from the income statement is transferred to the

balance sheet.

statement of owner's equity.

trial balance.

The ending balance of

capital

expenses

revenues

withdrawals

is then transferred to the owner's equity section of the balance sheet.

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