Greek Tavern Co was established on July 1, 2020 by a cash investment of $100,000. The...

Greek Tavern Co was established on July 1, 2020 by a cash investment of $100,000. The following is the Trial Balance prepared on September 30, 2020.

Account Title	Debit	Credit
Cash	$65,000
Accounts Receivable	70,000
Supplies	15,000
Prepaid Rent	50,000
Office Equipment	75,000
Accounts Payable		$5,000
Unearned Revenue		25,000
Notes Payable		75,000
Owner's Capital		100,000
Owner's Drawings	37,500
Service Revenue		150,000
Salaries and Wages expense	25,000
Commission expense	15,000
Utilities expense	2,500
TOTAL	$355,000	$355,000

During the three month period, the following activities occurred: 1. The physical checkup revealed that $4,000 worth of supplies is still on hand on September 30. 2. The annual depreciation of office equipment is $15,000. The equipment were purchased on August 1, 2020. 3. The unearned revenue was created on September 1, 2020 by an advance payment from a major customer for services extending over the period August 1 till December 31, 2020. 4. The loan was borrowed on July 1, 2020 for 5 years from BOND Bank. The bank charges 9% interest. 5. The firm pays its 5 employees a weekly salary of $6250. The policy is that it pays every Monday of the week for the previous 5 days' work, Monday through Friday. September 30, 2020 is a Tuesday. Last time the firm paid salary was on Monday September 29, 2020 for the week from 22 till 25. 6. Rogelio paid $50,000 cash on July 1, 2020 for 2 years' office rent.

Rogelio Legal Advisory firm follows the fiscal year extending from July 1 till September 30 and adjust Quarterly.

A. Journalize all the necessary adjusting entries on September 30, 2020 showing all the calculations.

B. Compute the Net Income.

Expert Solution

ekkarill92 answered 2 years ago

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