Reflect the financial performance of a business

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Reference no: EM133434352

The adjusting process

Danny Wolf recently opened her own financial service office, which she operates as a sole proprietorship. The name of the new entity is Wolverine. Danny experienced the following events during the organising phase of the new business and its first month of operation, April 2023. Some of the events were personal. Others were business transactions.

April 1 Received $100,000 capital contribution from the owner Danny.

Borrowed $30,000 cash from the bank for 12 month-loan, 2% interest rate per year, payable at end of each month.

Required

1 Use Excel to prepare an adjusted trial balance, including the adding two columns for the following adjustment data.
Adjustment data:
a. Accrued salaries expense, $2 000.
b. Depreciation expense $200 was recorded on the printer.
c. Prepaid insurance for April has expired.
d. Office supplies on hand, $200.
e. Unearned revenue earned during the month, $400.
f. Accrued service revenue, $1300.

2 Discuss why accrual-based accounting more accurately reflects the financial performance of a business than cash-based accounting.

Reference no: EM133434352

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