Reference no: EM132494094

Question - Aron, a new hired bookkeeper of Jolly Company, was gathering data in his first day of work. Below was one of the documents gathered to start preparing its unadjusted trial balance. These accounts were taken on its normal balances. Any adjustments will be taken to the Drawing account

Accounts Payable 190,500.00

Accounts Receivable 24,500.00

Cash 186,000.00

Computer Equipment 450,000.00

Transportation Expense 4,300.00

Jolly, Capital 528,055.00

Jolly, Drawings Notes Payable 34,560.00

Notes Receivable 34,450.00

Office Supplies 670,000.00

Oil and Gas Expense 3,100.00

Prepaid Insurance 51,600.00

Prepaid Rent 45,200.00

Rent Expense 3,400.00

Salaries Expense 34,000.00

Salaries Payable 54,000.00

Service Revenue 650,500.00

Supplies Expense 7,500.00

Unearned Service Revenue 68,900.00

Utilities Expense 4,565.00

At the end of the year, adjustment should be taken into consideration to provide an appropriate balance on each account. Below are the adjustments needed for December 31, 2018:

A. Cash received amounting to P45,000 related to contract of service that will be rendered next year.

B. A 70% service was rendered last December 1 related to the unearned account.

C. Cash paid amounting to P3,450 as an additional to transportation allowance of an employee for 2018.

D. Cash paid amounting to P4,300 as an additional to insurance to be taken in 2019.

E. A total of P30,000 rent was used for 2018.

F. An office supplies upon checking before the year end had a total balance of P550,000.

G. Additional salaries had been recorded before the end of the year amounting to P25,000, of which P20,000 were also paid on the same time.

H. Insurance was paid last July 1, 2018, representing a one-year insurance of the company.

I. Cash was received amounting to P4,500 on December 29, for the services took place on the same day.

J. Computer Equipment with a useful life of 5 years was acquired at the end of the current year.

K. Utilities billed related to electricity at December 31 amounting to P12,000.

L. Interest amounting to P34.56 was billed to Jolly Company for 2018.

Required -

1. Prepare adjusting entries.

2. Prepare Income Statement.

3. Prepare Balance Sheet.