Question

The unadjusted trial balance and adjustment data for Elbow Cycle Repair Shop are provided.

Prepare work sheet.

ELBOW CYCLE REPAIR SHOP Trial Balance January 31, 2021
		Debit		Credit
Cash		$    3,200
Accounts receivable		6,630
Prepaid insurance		6,420
Supplies		5,240
Land		50,000
Building		190,000
Accumulated depreciation—building				$ 11,000
Equipment		27,000
Accumulated depreciation—equipment				4,500
Accounts payable				6,400
Unearned revenue				21,950
Mortgage payable				182,000
H. Dude, capital				61,000
H. Dude, drawings		101,100
Service revenue				235,550
Salaries expense		115,200
Utilities expense		12,000
Interest expense		5,610
		$522,400		$522,400

Additional information:

1. The 12-month insurance policy was purchased on June 1, 2020.
2. A physical count of supplies shows $1,310 on hand on January 31, 2021.
3. The building has an estimated useful life of 50 years. The equipment has an estimated useful life of 9 years.
4. The mortgage payable has a 5% interest rate. Interest is paid on the first day of each month for the previous month's interest.
5. By January 31, 2021, $1,300 of services related to the unearned revenue have been provided.
6. During the next fiscal year, $4,500 of the mortgage payable is to be paid. Prepare a work sheet for the year ended January 31, 2021.

Answer 1

Since no format was given, i have used general format

January 31, 2021
	Unadjusted Trial Balance	Adjustments		Adjusted Trial Balance	Income Statement	Balance Sheet
	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	$           3,200				$           3,200				$               3,200
Accounts receivable	$           6,630				$           6,630				$               6,630
Prepaid insurance	$           6,420			$       4,280	$           2,140				$               2,140
Supplies	$           5,240			$       3,930	$           1,310				$               1,310
Land	$         50,000				$        50,000				$            50,000
Building	$      1,90,000				$     1,90,000				$         1,90,000
Accumulated depreciation—building		$         11,000		$       3,800		$          14,800				$           14,800
Equipment	$         27,000				$        27,000				$            27,000
Accumulated depreciation—equipment		$           4,500		$       3,000		$             7,500				$              7,500
Accounts payable		$           6,400				$             6,400				$              6,400
Unearned revenue		$         21,950	$                1,300			$          20,650				$           20,650
Interest Payable				$           758		$                758				$                 758
Current Maturity of Mortgage payable				$       4,500		$             4,500				$              4,500
Mortgage payable		$       1,82,000	$                4,500			$       1,77,500				$        1,77,500
H. Dude, capital		$         61,000				$          61,000				$           61,000
H. Dude, drawings	$      1,01,100				$     1,01,100				$         1,01,100
Service revenue		$       2,35,550		$       1,300		$       2,36,850		$       2,36,850
Salaries expense	$      1,15,200				$     1,15,200		$     1,15,200
Utilities expense	$         12,000				$        12,000		$        12,000
Interest expense	$           5,610		$                   758		$           6,368		$          6,368
Insurance expense			$                4,280		$           4,280		$          4,280
Supplies Expense			$                3,930		$           3,930		$          3,930
Depreciation Expense - Building			$                3,800		$           3,800		$          3,800
Depreciation Expense - Equipment			$                3,000		$           3,000		$          3,000
Total	$      5,22,400	$       5,22,400	$          21,568	$   21,568	$   5,29,958	$     5,29,958	$   1,48,578	$     2,36,850	$      3,81,380	$      2,93,108
Net Income							$        88,272			$           88,272
Total							$     2,36,850	$       2,36,850	$         3,81,380	$        3,81,380

Current Maturity adjustment entry can not be recorded as per format.
Interest on loan = $182000 x 5% x 1/12 = $758