Question

1. 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

Answer 1

Becky’s Carpets, Inc.,					Becky’s Carpets, Inc.,				Becky’s Carpets, Inc.,
Adjusted Trial Balance					Income Statement				Balance Sheet
31-Dec-19				Service revenue		30,700		Assets			Liabilities & Owners' Equity
Accounts	Debit	Credit		Less: Expenses				Current Assets			Current Liabilities
Cash	27,000			Depreciation Exp.	800			Cash	27,000		Accounts payable	1,800
Accounts receivable	15,000			Salary expense	17,200			Accounts receivable	15,000		Unearned service revenue	5,200
Supplies	3,400			Supplies Expense	1,100			Supplies	3,400		Salary Payable	1500
Prepaid Insurance	4,300			Advertising expense	1700			Prepaid Insurance	4,300		Total Current Liabilities		8,500
Equipment	89,000			Insurance Expence	700			Total Current Assets		49,700	Equity
Depreciation Exp.	800			Total Expenses		21,500					Common stock	93,200
Accumulated depreciation - Equipment		6,800		Net Profit		9,200		Equipment	89,000		Retained earnings	30,200
Accounts payable		1,800						Less: Accumulated depreciation - Equipment	-6,800	82,200	Total Equity		123,400
Unearned service revenue		5,200						Total Assets		131,900	Total Liabilities & Owners' Equity		131,900
Common stock		93,200
Retained earnings		21,000
Service revenue		30,700
Salary expense	17,200
Salary Payable		1,500
Supplies Expense	1,100
Advertising expense	1700
Insurance Expence	700
Total	160,200	160,200