Reference no: EM131816252
Q1 What is a prepaid expense?
Q2. What is unearned revenue?
Q3.The adjusted trial balance of Ryan Financial Planners appears below.
Using the information from the adjusted trial balance, you are required to prepare for the month ending December 31:
1. an income statement.
2. a retained earnings statement.
3. a statement of financial position.
RYAN FINANCIAL PLANNERS
Adjusted Trial Balance
December 31, 2012
Debit Credit
Cash ............... € 4,400
Accounts Receivable......................................................................... 2,200
Office Supplies.................................................................................. 1,800
Office Equipment.............................................................................. 15,000
Accumulated Depreciation-Office Equipment............................... € 4,000
Accounts Payable.............................................................................. 3,800
Unearned Revenue............................................................................ 5,000
Share Capital-Ordinary..................................................................... 10,000
Retained Earnings (Beginning balance, 1st Dec 2012)...................... 4,400
Dividends ......................................................................................... 2,500
Service Revenue................................................................................ 3,700
Office Supplies Expense.................................................................... 600
Depreciation Expense........................................................................ 2,500
Rent Expense..................................................................................... 1,900 ______
€30,900 €30,900
Q4. The trial balance before adjustment of XYZ Company reports the following balances:
Dr. Cr.
Accounts receivable $100,000
Allowance for doubtful accounts $ 2,500
Sales (all on credit) 750,000
Sales returns and allowances 40,000
Instructions
Prepare the entries for estimated bad debts assuming that doubtful accounts are estimated to be (1) 6% of gross accounts receivable and (2) 1% of net sales.