Reference no: EM132737017
Question - At the end of its first month of operations, Watson Answering Service has the following unadjusted trial balance:
Watson Answering Service August 31, 2020 Trial Balance
Debit Credit
Cash P5,400
Accounts Receivable 2,400
Supplies 2,800
Prepaid Insurance 1,300
Equipment 60,000
Notes Payable P40,000
Accounts Payable 2,400
Ray Watson, Capital 30,000
Ray Watson, Drawing 1,000
Service Revenue 4,900
Salaries Expense 3,200
Utilities Expense 800
Advertising Expense 400
P77,300 P77,300
Other data:
1. Insurance expires at the rate of P200 per month.
2. P1,000 of supplies are on hand at August 31.
3. Interest of P500 on the notes payable has accrued during August.
Instructions -
(a) Prepare a worksheet
(b) Prepare a classified balance sheet assuming P35,000 of the notes payable are long-term.
(c) Journalize the closing entries.