Reference no: EM131883600

Problem

JNK Accounting To: Pat Intern Date: January 3, 2017 From: T. Tough, Supervisor Subject: Adams Limited As you know, we recently took on a new client, Adams Limited. The company has just finished its first year of business, and the owners would like us to prepare GAAP financial statements. I have attached a spreadsheet with Adams Limited' unadjusted trial balance, and I need you to prepare adjusting entries, an adjusted trial balance and financial statements for 2016. Although the accounts are in chart-of-accounts order, they first need to be separated into debit and credit columns. You will need the following information to make the adjusting entries. 1. The prepaid insurance represents a one-year insurance policy purchased on August 1, 2016. 2. A physical inventory showed that only $480 worth of general office supplies remained on hand as of December 31. 3. The annual interest rate on the mortgage payable was 6%. The company took out the 15-year mortgage for its land and building on January 1, 2016, and the first interest payment is due January 1, 2017. 4. The five-year, 8% note payable was issued on July 1, 2016. The entire principal is due at maturity and the interest is due annually on June 30. 5. The balance in the deferred revenue account should be $16,000. 6. The fixed assets have the following useful lives and were all purchased at the beginning of the year. a. Building - 30 years with a $5,000 salvage value b. Office equipment - 5 years c. Computer equipment - 5 years 7. Employees have earned $15,500 since the last pay period. 8. You determine that the appropriate bad debt expense is 1.5% of revenue. 9. Income taxes are 25% of income before taxes. Since this is your first work product for the JNK, I need you to frankly assess your work to help me determine what projects to assign you in future. Please include that assessment when you submit the spreadsheet. Some things I would like to know are the number of hours you spent, what things you remembered from school and what you needed to research, your comfort level with the assignment, and whether you think you would like to have more challenging work in the future. After completing this assignment, what do you see as your strengths and weaknesses? What additional training do you feel you need, if any? I look forward to working with you. Please let me know if you have questions or concerns.

Adams Limited Worksheet 12/31/16
Unadjusted trial balance
Cash 118,500
Accounts Receivable 90,500
Prepaid Insurance 42,000
Office Supplies 4,500
Office Equip. 45,800
Computer Equip. 125,800
Building 365,000
Land 42,500
Accounts Payable 68,400
Deferred revenue 34,000
Mortgage Payable 150,000
Notes Payable 44,000
Capital Stock 50,000
Paid-in Capital in Excess of Par Value 256,350
Computer & Consulting Revenue 756,000
Salary Expense 403,000
Advertising Expense 26,500
Repairs & Maint. Expense 40,000
Utitilities expense 54,650

I also need a income statment, the statement in retained earnings and a balance sheet!?