Unsal Company was organized on January 1 , 2003. At the end of the first year of operations, December 31, 2003, the bookkeeper prepared the following trial balances (amounts in thousands of dollars):

Required: 1. Based on inspection of the two trial balances, give the 2003 adjusting entries developed by the bookkeeper (provide brief explanations). 2. Based on these data, give the 2003 closing entries with brief explanations. 3. Answer the following questions (show computations):

a. How many shares of stock were outstanding at year-end?

b. What was the amount of interest expense included in the total expenses?

c. What was the balance of Retained Earnings on December 31, 2003?

d. What was the average income tax rate?

e. How would the two accounts Rent Receivable and Unearned Rent Revenue be reported on the balance sheet?

/ Explain why cash increased by $40,000 during the year even though net income was comparatively very low.

g. What was the amount of earnings per share for 2003?

h. What was the average selling price of the shares?

i. When was the insurance premium paid and over what period of time did the coverage extend?

/. What was the net profit margin for the year?

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Unadjusted Trial Balance Adjustments Adjusted Trial Balance 11 12 Account No. Account Titles Cash Accounts receivable Debit Credit Debit Credit Debit Credit 40 40 17 17 13 Prepaid insurance 2 1 14 Rent receivable 2 15 Property, plant, and equipment 46 46 16 Accumulated depreciation 17 Other assets 6 9 18 Accounts payable 27 11 27 = 19 Wages payable 20 Income taxes payable 21 Unearned rent revenue 7 2354 22 22382 23 Note payable (10% interest: dated January 1, 2003) Contributed capital (1,000 shares) 24 Retained earnings 25 Revenues (total) 26 Expenses (total including interest) 27 Income tax expense Totals 20 20 30 30 3 3 986 98 103 68 83 182 182 203 203