Answer:
Security First
a) Adjusted Trial Balance at December 31:
Cash $129,880
Accounts Receivable -Fees 9,800
Supplies 1,500
Equipment 106,000
Accumulated depreciation - Equipment $62,400
Unearned member fees 2,000
Long-term notes payable 92,000
P. Clark, Capital 90,000
P. Clark, Withdrawals 27,000
Member fees earned 77,800
Supplies Expense 8,500
Salaries expense 17,900
Salaries Payable 1,900
Interest expense 6,645
interest Payable 1,125
Depreciation Expense 20,000
Total $327,225 $327,225
b) Income Statement for the year ended December 31:
Member Fee Earned $77,800
Expenses:
Supplies Expense 8,500
Salaries expense 17,900
Interest expense 6,645
Depreciation 20,000 ($53,045)
Net Income $24,755
b) Balance Sheet as at December 31:
Assets:
Cash $129,880
Accounts Receivable -Fees 9,800
Supplies <u>1,500
</u> 141,180
Noncurrent Assets:
Equipment 106,000
Accumulated depreciation ($62,400
) 43,600
Total Assets $184,780
Liabilities + Equity:
Current Liabilities:
Unearned Member Fee 2,000
Salaries Payable 1,900
Interest Payable <u>1,125</u>
Total Current Liabilities 5,025
Noncurrent Liabilities:
Long-term Notes Payable <u>92,000</u> $97,025
Capital 90,000
Drawings (27,000)
Net Income <u>24,755</u> $87,755
Total Liabilities + Equity $184,780
Explanation:
1. Unadjusted Security First Trial Balance at December 31:
Account Title Debit Credit
Cash $129,880
Supplies 10,000
Equipment 106,000
Accumulated depreciation - Equipment $42,400
Unearned member fees 18,000
Long-term notes payable 92,000
P. Clark, Capital 90,000
P. Clark, Withdrawals 27,000
Member fees earned 52,000
Salaries expense 16,000
Interest expense 5,520
Total $294,400 $294,400
2. Salaries Expense
as per Trial balance $16,000
Salaries Payable 1,900
Total Salaries Expense $17,900
3. Supplies Expense
Supplies = $10,000
Ending Supplies $1,500
Supplies Expense = $8,500
4. Interest Expense
As per trial balance = $5,520
Interest Payable $1,125
Interest Expense = $6,645
5. Unearned Fees
As per trial balance = $18,000
Earned fees 16,000
Balance $2,000
6. Member Fees earned
As per trial balance = $52,000
Earned 16,000
Accounts Receivable 9,800
Total $77,800
7. Accumulated Depreciation:
As per trial balance $42,400
Depreciation charge 20,000
Balance $62,400
