Question

Jacksonville Financial Service Co. which specializes in appliance repair service, is owned and operated by Cindy Latty.

Unadjusted Trial Balance December 31,2010

	Debit balance	Credit balance
Cash	$10,200
Accounts receivable	$34,750
Prepaid insurance	$6,000
Supplies	$1,725
Land	$50,000
Building	$80,750
Accumulated depreciation-Building		$37,850
Equipment	$45,000
Accumulated depreciation-Equipment		$17,650
Accounts payable		$3,750
Unearned rent	$3,600
Cindy Latty, Capital		$103,550
Cindy Latty, Drawings	$8,000
Fees earned		$158,600
Salaries and Wages expense	$56,850
Utilities expense	$14,100
Adversiting expense	$7,500
Repair expense	$6,100
Miscelleneous Expense	$4,025

The data related to year ended adjustments are as follows:

a.	Depreciation of building for the year, $2,100
b.	Depreciation of equipment for the year, $3,000
c.	Accrued salaries and wages at Dec. 31, $800
d.	Unexpired insurance at Dec. 31, $1,500
e.	Fees earned but unbilled on Dec.31, $2,150
f.	Supplies on hand at Dec. 31, $600
g.	Rent unearned at Dec. 31, $1,500

Required:

Prepare Balance Sheet and Income and Expenditure Statement as at 31, 2010.

Answer 1

Jacksonville Financial Service Co.
Income Statement
For the Year Ended December 31, 2010
Revenue
Service Revenue	160,750
Rent Revenue	2,100
Total Revenue		162,850
Expenses
Salaries and Wages Expense	57,650
Utilities Expense	14,100
Advertising Expense	7,500
Repairs Expense	6,100
Insurance Expense	4,500
Depreciation Expense—Equipment	3,000
Depreciation Expense—Building	2,100
Supplies Expense	1,125
Miscellaneous Expense	4,025
Total Expenses		100,100
Net Income		62,750
Jacksonville Financial Service Co.
Balance Sheet
As of December 31, 2010
Assets
Current Assets
Cash	10,200
Accounts Receivable	36,900
Prepaid Insurance	1,500
Supplies	600
Total Current Assets		49,200
Property, Plant, and Equipment
Land	50,000
Building	80,750
Less: Accumulated Depreciation - Building	(39,950)
Equipment	45,000
Less: Accumulated Depreciation - Equipment	(20,650)
Total Property, Plant, and Equipment		115,150
Total Assets		164,350
Liabilities and Equity
Current Liabilities
Accounts Payable	3,750
Salaries and Wages Payable	800
Unearned Rent	1,500
Total Current Liabilities		6,050
Equity
Cindy Latty, Capital (103,550 + 62,750 - 8,000)		158,300
Total Liabilities and Equity		164,350