Answer:
Flint
A. See worksheet.
B. Income Statement for the month of March 2019:
Service Revenue $7,200
Supplies Expense -1,100
Depreciation Exp. -254
Salaries Expense -1900
Miscellaneous Exp. -360
Net Income $3,586
C. Retained Earnings Statement for the month of March
Beginning Retained Earnings $2,700
Net Income 3,586
Dividends -1,200
Closing Retained Earnings $5,086
D. A Classified Balance Sheet at March 31:
Assets:
Current Assets:
Cash $4,900
Accounts Receivable 3,400
Supplies 700 $9,000
Long-term Assets:
Equipment $11,176
less Acc. Depreciation 1,524 $9,652
Total Assets $18,652
Liabilities::
Current Liabilities:
Accounts Payable $2,500
Unearned Revenue 200
Salaries & Wages Payable 600 $3,300
Equity:
Common Stock $10,266
Retained Earnings 5,086 $15,352
Total Liabilities + Equity $18,652
E. Journal of Adjusting Entries:
March 31, 2019:
1. Debit Supplies Expense $1,100
Credit Supplies $1,100
To record supplies used in March.
2. Debit Depreciation Expense $254
Credit Accumulated Depreciation $254
To record depreciation expense for the month
3. Debit Unearned Service Revenue $500
Credit Service Revenue $500
To record revenue earned.
4. Debit Salaries & Wages $600
Credit Salaries & Wages Payable $600
To record accrued salaries.
F. Journal for closing entries:
March 31:
Debit Income Summary $3,614
Credit Supplies Expense $1,100
Credit Depreciation Expense $254
Credit Salaries & Wages Expense $1,900
Credit Miscellaneous Expense $360
To close temporary accounts to the income summary.
Debit Service Revenue $7,200
Credit Income Summary $7,200
To close temporary accounts to the income summary.
Debit Retained Earnings $1,200
Credit Dividends $1,200
To close the account to the Retained Earnings.
Explanation:
a) A Trial Balance is a list of debit and credit balances extracted from the ledger. It is a tool for checking if the two sides agree in total. It also forms the basis for preparing financial statements after adjusting entries have been made.
b) Adjusting entries are journal entries made to recognize some accrued expenses and income for the period, in line with the accrual concept and the matching principle of generally accepted accounting principles.
c) Closing entries are journal entries made to close temporary accounts to the income summary; thus leaving only permanent accounts, which are carried over to the next accounting period.
