Reference no: EM132945250
Question - Adjusting Entries, Income Statement & Balance Sheet - Spruce SpringClean Inc., a feather duster retailer, commenced operations on January 1, 2023. The unadjusted trial balance for Spruce SpringClean as of March 31, 2023, follows along with additional supporting information:
Cash 82,400
A/R 78,400
Supplies 7,200
Inventory 120,000
Prepaid Insurance 5,200
Building 240,000
Equipment 128,000
Accounts Payable 71,200
Deferred Revenue 2,880
Note Payable 200,000
Common Stock 176,000
Retained Earnings 141,520
Dividends 2,400
Sales 560,000
COGS 320,000
Adv Expense 24,000
Salaries Expense 144,000
Totals 1,151,600 1,151,600
Additional information:
a. Examination of supplies indicates that $4,800 of supplies are still available on March 31, 2023.
b. One year of insurance coverage was purchased on January 1, 2023, for $5,200 cash.
c. The building and equipment (purchased on January 1, 2023) will be depreciated evenly over the useful lives of 20 years and 5 years, respectively.
d. $1,280 of the $2,880 in Deferred revenue relates to obligations that will be fulfilled after March 31, 2023.
e. Annual interest on the note payable is 9%. Interest is due in one year upon the maturity of the note. The note was issued on January 1, 2023.
f. Utilities for March 2023 of $1,680 have been incurred but not yet paid.
g. At the end of March, the company provided a new monitoring system to a customer for real-time assessments. The company will bill the customer $960 for the sale, which was completed in March.
h. The income tax rate is 30%.
i. Additional general ledger accounts, currently with a zero balance, are: 170 Accumulated Depreciation-Building, 516 Supplies Expense, 171 Accumulated Depreciation-Equipment, 517 Insurance Expense, 203 Utilities Payable, 518 Depreciation Expense, 204 Income Taxes Payable, 209 Interest Payable, 519 Utilities Expense, 530 Interest Expense, 535 Income Tax Expens
Required -
a. Prepare all necessary adjusting entries on March 31 for the three-month period ended March 31, 2023.
b. Prepare an adjusted trial balance on March 31, 2023.
c. Prepare a multiple-step Income Statement.
d. Prepare all necessary closing entries.
e. Prepare a classified Balance Sheet.