In: Accounting
The adjusted trial balance of Jacks Financial Planners appears below and using the information from the adjusted trial balance, you are to prepare for the year ending December 31:
1. an income statement;
2. a statement of owner’s equity; and
3. a balance sheet.
JACKS FINANCIAL PLANNERS
Adjusted Trial Balance
December 31, 2010
_____________________________________________________________________________
Debit Credit
Cash ........................................................................................................ $ 15,200
Accounts Receivable .............................................................................. 2,200
Office Supplies ....................................................................................... 1,800
Office Equipment ................................................................................... 15,000
Accumulated Depreciation—Office Equipment .................................... $ 4,000
Accounts Payable ................................................................................... 4,000
Unearned Service Revenue .................................................................... 5,000
S. Jacks, Capital....................................................................................... 24,400
S. Jacks, Drawings .................................................................................. 2,500
Service Revenue ..................................................................................... 6,500
Office Supplies Expense ........................................................................ 600
Depreciation Expense ............................................................................. 2,500
Telephone Expense.................................................................................. 400
Wages Expense........................................................................................ 1,800
Rent Expense .......................................................................................... 1,900
$43,900 $43,900
17. (Chapter 3)
Chris’s Florist Shop records all prepaid costs as assets and all revenue collected in advance as liabilities, and makes adjustments only at its fiscal year end, which is June 30th. All of Chris’s purchases are for cash unless stated otherwise. The following information relates to Chris’s June 30, 2011 year end, its first year of operations.
1. On July 2nd, 2010, Chris purchased equipment for $12,000. The equipment is expected to have a useful life of 8 years.
2. On August 1, 2010 a one-year insurance policy was purchased for $1,740.
3. On February 1, 2011 a corporate customer paid $2,080 as full payment for a one year contract for fresh flowers to be delivered to its offices every Monday morning. At June 30, 21 of the required 52 deliveries had been completed.
4. On July 2, 2010 Chris purchased enough supplies to last the entire first year of operations for $4,400. At June 30, 2011, Chris counted the supplies on hand and calculated the cost, which amounted to $1,035.
5. On May 31, Chris borrows $20,000 from the bank to increase the amount of inventory and expand the business. The interest rate on the loan is 6% and requires monthly payments of interest on the first of each month. The principal is due in one year’s time. The first interest payment is due July 1.
6 Chris pays her store assistant on alternate Fridays. The last pay day in June was June 20th and the first pay day after year end July is July 4th. The assistant worked 30 hours during this period, of which 20 were in July, and the rest in June. The assistant earns $9.50 an hour.
7. June 28th is a busy day and Chris has to make deliveries to numerous customers. On July 5th she reviews her June billings, and realizes that she made one large sale for $325 on June 30th for flowers that were delivered, but for which no invoice was issued. The sale was to a regular customer who will pay promptly when the invoice is sent.
8. Chris offers customers a coupon valued at $20 every ten floral arrangements that a customer buys. At June 30th, she reviews her records and finds that 18 customers have purchased enough flowers to claim coupons. Chris records the cost of these coupons as “Coupon Expense” when the customer becomes entitled to them.
Instructions:
(a) For each transaction, prepare any adjusting entries required at June 30, 2011.
1 | ||
JACKS FINANCIAL PLANNERS | ||
Income Statement For the Month Ended December 31, 2010 | ||
Revenues Service revenue | 6,500 | |
Depreciation expense | 2,500 | |
Supplies expense | 600 | |
Telephone expense | 400 | |
Wages expense | 1,800 | |
Rent expense | 1900 | |
Total expenses | -7,200 | |
Net Loss | -700 | |
2 | ||
JACKS FINANCIAL PLANNERS | ||
Statement of Owner's Equity | Amount $ | Amount $ |
S. Jack Capital December 31 | 24400 | |
Less: Drawings | 2,500 | |
Net Loss | 700 | -3,200 |
S. Jack Capital , December 31 | 21,200 | |
3 | ||
JACKS FINANCIAL PLANNERS | ||
Balance Sheet December 31, 2010 | ||
Assets | ||
Cash | 15,200 | |
Accounts receivable | 2,200 | |
Office supplies | 1,800 | |
Office equipment | 15,000 | |
Less: Accumulated depreciation--office equipment | -4,000 | 11,000 |
Total assets | 30,200 | |
Liabilities and Stockholders' Equity Liabilities | ||
Accounts payable | 4,000 | |
Unearned revenue | 5,000 | |
Total liabilities | 9,000 | |
Stockholders' Equity | ||
S. Jack Capital | 21,200 | |
Total liabilities and stockholders' equity | 30,200 |
Please ask the question 17 as a separate one