Prepare an income statement for the year ended march

Assignment Help Financial Accounting

Reference no: EM13956655

Part 1-

1. The balance in the supplies account, before adjustment at the end of the year, is $2,975. Journalize the adjusting entry^-required if the amount of supplies on hand at the end of the year is $614.

2. The balance in the prepaid insurance account, before adjustment at the end of the year, is $6,175. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment: (a) the amount of insurance expired during the year is $4,180; (b) the amount of unexpired insurance applicable to future periods is $1,995.

3. In a recent balance sheet, Microsoft Corporation reported Property, Plant, and Equipment of $6,078 million and Accumulated Depreciation of $3,855 million.

a. What was the book value of the fixed assets?

b. Would the book value of Microsoft Corporation's fixed assets normally approximate their fair market values?

4. Danville Company specializes in the repair of music equipment and is owned and operated by Harry Nagel. On April 30, 2008, the end of the current year, the accountant for Danville Company prepared the following trial balances:

Danville Company Trial Balance April 30, 2008
	Unadjusted		Adjusted
	Debit Balances	Credit Balances	Debit Balances	Credit Balances
Cash	12,750		12,750
Accounts Receivable	36,500		36,500
Supplies	3,750		900
Prepaid Insurance	4,750		1,500
Equipment	120,150		120,150
Accumulated Depreciation-Equipment		31,500		34,000
Automobiles	36,500		36,500
Accumulated Depreciation-Automobiles		18,250		20,400
Accounts Payable		8,310		8,800
Salaries Payable		-		2,000
Unearned Service Fees		6,000		2,900
Harry Nagel, Capital		131,340		131,340
Harry Nagel, Drawing	25,000		25,000
Service Fees Earned		244,600		247,700
Salary Expense	172,300		174,300
Rent Expense	18,000		18,000
Supplies Expense			2,850
Depreciation Expense-Equipment			2,500
Depreciation Expense-Automobiles			2,150
Utilities Expense	4,300		4,790
Taxes Expense	2,725		2,725
Insurance Expense	-		3,250
Miscellaneous Expense	3,275		3,275
	440,000	440,000	447,140	447,140

Instructions

Journalize the seven entries that adjusted the accounts at April 30. None of the accounts were affected by more than one adjusting entry.

Part 2-

1. The following revenue and expense account balances were taken from the ledger of Cupcake Services Co. after the accounts had been adjusted on October 31, 2008, the end of the current fiscal year:

Depreciation Expense	$10,000	Service Revenue	$163,375
Insurance Expense	6,000	Supplies Expense	2,875
Miscellaneous Expense	4,750	Utilities Expense	18,750
Rent Expense	51,500	Wages Expense	92,800

Prepare an income statement.

2. From the following list, identify the accounts that should be closed to Income Summary at the end of the fiscal year:

a. Accounts Receivable g. Keri Upshaw, Drawing

b. Accumulated Depreciation- Equipment h. Land Equipment

c. Depreciation Expense-Equipment i. Supplies

d. Equipment J. Supplies Expense

e. Fees Earned k. Wages Expense

f. Ken Upshaw, Capital l. Wages Payable

3. Firefly Services Co. offers its services to individuals desiring to improve their personal images. After the accounts have been adjusted at October 31, the end of the fiscal year, the following balances were taken from the ledger of Firefly Services Co.

Natalie Wilson, Capital	$554,500	Rent Expense	$65,000
Natalie Wilson, Drawing	20,000	Supplies Expense	3,150
Fees Earned	293,300	Miscellaneous Expense	7,100
Wages Expense	250,000

Journalize the four entries required to close the accounts.

4. Blink-On Company maintains and repairs warning lights, such as those found on radio towers and lighthouses. Blink-On Company prepared the end-of-period spreadsheet (work sheet) at the top of the following page at March 31, 2008, the end of the current fiscal year:

Blink-On Company
End-of-Period Spreadsheet (Work Sheet)
For the Year Ended March 31, 2008
	Unadjusted Trail Balance		Adjustments		Adjusted Trial Balance		Income Statement		Balance Sheet
	Unadjusted Trail Balance		Adjustments		Adjusted Trial Balance		Income Statement		Balance Sheet
Account Title	Dr.	Cr.	Dr.	Cr.	Dr.	Cr.	Dr.	Cr.	Dr.	Cr.
Cash	6,300				6,300				6,300
Accounts Receivable	18,900		(a) 3,500		22,400				22,400
Prepaid Insurance	4,200			(b) 2,800	1,400				1,400
Supplies	2,730			(c) 1,600	1,130				1,130
Land	98,000				98,000				98,000
Building	140,000				140,000				140,000
Acc. Depr.-Building		100,300		(d) 1,400		101,700				101,700
Equipment	100,500				100,500				100,500
Acc. Depr.-Equipment		85,100		(e) 3,200		88,300				88,300
Accounts Payable		5,700				5,700				5,700
Unearned Rent		2,100	(g) 1,200			900				900
Capital Stock		18,000				18,000				18,000
Retained Earnings		60,100				60,100				60,100
Dividends	5,600				5,600				5,600
Fees Revenue		253,700		(a) 3,500		257,200		257,200
Salaries & Wages Expense	102,500		(f) 1,800		104,300		104,300
Advertising Expense	21,700				21,700		21,700
Utilities Expense	11,400				11,400		11,400
Repairs Expense	8,850				8,850		8,850
Misc. Expense	4,320				4,320		4,320
	525.000	525.000
Insurance Expense			(b) 2,800		2,800		2,800
Supplies Expense			(c) 1,600		1,600		1,600
Depr. Exp.-Building			(d) 1,400		1,400		1,400
Depr. Exp.-Equipment			(e) 3,200		3,200		3,200
Salaries & Wages Payable				(f) 1,800		1,800				1,800
Rent Revenue				(g) 1,200		1,200		1,200
			15,500	15,500	534900	534,900	159,570	258,400	375,330	276,500
Net income							98,830			98,830
							258,400	258,400	375,330	375,330

Instructions

1. Prepare an income statement for the year ended March 31.

2. Prepare a statement of owner's equity for the year ended March 31. No additional investments were made during the year.

3. Prepare a balance sheet as of March 31.

4. Based upon the end-of-period spreadsheet (work sheet), journalize the closing entries.

5. Prepare a post-closing trial balance.

Reference no: EM13956655

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