Question

1. The following selected accounts appeared in the unadjusted trial balance of Hawthorne Industries: -

Accounts Receivable	$176,000
Prepaid Rent	69,000
Prepaid Insurance	36,000
Equipment	280,000
Accumulated depreciation - equipment	30,000
Unearned Service Revenue	24,000
Salary Expense	130,000

Additional data:

1. One-half of the revenue received in advance has been earned by December 31, 2019
2. The prepaid insurance represents three years premium on a policy providing coverage starting September 1, 2019
3. Since the last payday, employees have earned an additional $2,500 which has not yet been paid or recorded
4. The equipment has an estimated life of 10 years and no expected value at the end of its life
5. Services performed but unbilled and uncollected at year end amounted to $6,500
6. The prepaid rent relates to one-half of the year beginning on October 1, 2019

Prepare the necessary year-end adjusting entries as of December 31, 2019.

2. The unadjusted trial balance and information regarding adjusting entries for Becky’s Carpets, Inc., is given below. Prepare the financial statements for Becky’s Carpet Inc., after making the necessary adjustments

Becky’s Carpets, Inc.,

Unadjusted Trial Balance

December 31, 2019

Accounts	Debit	Credit
	25,500
Accounts receivable	15,000
Supplies	4,500
Prepaid Insurance	5,000
Equipment	89,000
Accumulated depreciation - Equipment		6,000
Accounts payable		1,800
Unearned service revenue		3,700
Common stock		93,200
Retained earnings		21,000
Service revenue		30,700
Salary expense	15,700
Advertising expense	1,700
	156,400	156,400

Adjusting entry information:

1. Salaries earned but unpaid at the end of the year, $1,500
2. Insurance expired, 700
3. Depreciation expense, 800
4. Unearned service revenue earned during the year, $1,500
5. The inventory of supplies at year end was $3,400

3. Galarus company had the following trial balance as of December 31, 2019

Galarus Company

Trial Balance

December 31, 2019

Accounts	Debit	Credit
	10,600
Accounts receivable	13,200
Supplies	2,400
Prepaid Insurance	1,500
Equipment	38,500
Accumulated depreciation - Equipment		8,300
Accounts payable		2,500
Unearned service revenue		8,900
Common stock		15,000
Retained earnings		10,100
Service revenue		35,000
Salary expense	11,200
Advertising expense	2,400
	79,800	79,800

Additional information:

1. Supplies used during the month, $450
2. Prepaid insurance expired during the month, $300
3. Depreciation on equipment for the month, $550
4. Unearned service revenue earned during the month, $2,200
5. Accrued salary expense at the end of the month, $650

Based on the trial balance and the additional data, prepare financial statements for the year ended December 31, 2019

Answer 1

Hawthorne Industries-

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