Reference no: EM132992436

Problem a) Journalize adjusting entries on September 30, 2021.

Problem b) Prepare the company's adjusted trial balance as of September 30, 2021.

Problem c) Prepare the company's functional-form Income Statement for the fiscal year ended September 30, 2021.

Problem d) Prepare the company's Statement of Changes in Equity for the fiscal year ended September 30, 2021.

"Practicing Fundamentals: Completing the Accounting Cycle for FAN DE SOL"

FAN DE SOL (the company), which follows accounting standards and uses the periodic inventory system, is a merchandising business that buys and sells solar-powered electric fans. Its trial balance as of fiscal year-end September 30, 2021, before any adjustments.

Information for adjusting entries are as follows:

1. Rent income amounting to ?60,000 has been earned but not yet received from building tenants nor recorded in the company's books as of fiscal year-end.

2. When office supplies are purchased, their cost is recorded as an asset. As supplies are used, a record

of those used is kept. The record sheet shows that ?5,500 of supplies were used in September.

3. Store salaries of ?10,000 for the last week of September 2021 have not been recorded.

4. The reported Prepaid Insurance balance represents monthly insurance payments from August 1 to December 31, 2021 which was paid in advance on July 15, 2021.

5. Interest of ?4,500 has been earned on notes receivable but has not yet been received as of fiscal year-end.

6. The building has an estimated useful life of 20 years and a salvage value of ?200,000.

7. The store furniture and equipment have an estimated useful life of eight years, with no salvage value.

8. Of the reported Unearned Sales account balance, one-third has been earned as at fiscal year-end.

9. It is estimated that 12% of the accounts receivable is uncollectible.

10. A physical count indicated that ?47,500 of inventory was on hand at the end of the fiscal year.