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In: Accounting

Q7. Counterpoint Studies Inc. has completed all the entries for the fiscal year ending November 30,...

Q7. Counterpoint Studies Inc. has completed all the entries for the fiscal year ending November 30, 2019, except the month of November’s adjusting entries. The following information is available to make the adjustments.
 Annual depreciation on equipment totals $9,000
 Interest accrued on the bank loan is $500
 Unbilled services for the month were $8,100
 The annual insurance policy was purchased December 1, 208 for $21,900
 Additional shares were issued for $3,000 cash
 The balances at the beginning of the year for Contributed Capital and Retained Earnings were $10,000 and $26,750 respectively.
Required:
a) Complete the six-column worksheet for Counterpoint Studios Inc. adding line items as needed.
Counterpoint Studios Inc. Worksheet
November 30, 2019
Account Title
Unadjusted Trial Balance
DR CR
Adjusted Trial Adjustments Balance
DR CR DR
CR
Cash
52,250
Accounts Receivable
24,800
Prepaid Insurance
1,825
Equipment
305,800
Accumulated depreciation - Equipment
107,250
Accounts Payable
31,500
Bank Loan
140,000
Contributed Capital
10,000
Retained Earnings
26,750
Service Revenue
382,500
Advertising Expense
100,000
Salaries Expense
185,000
Insurance Expense
20,075
Depreciation Expense
8,250
Total
b) c)
698,000 698,000
Prepare the statement of earnings for the year ended November 30, 2019. Prepare the statement of changes in shareholders’ equity for the year ended November 30, 2019.

Solutions

Expert Solution

1

Counter Point Studies Inc
November 30,2019 Account Title Unadjusted Trial Balance Adjusted Trial Balance
Dr Cr Dr Cr
Cash 52250 55250
Accounts Receivable 24800 24800
Prepaid Insurance 1825 1825 1825
Accrued Revenue 8100
Equipment 305800 305800
Accumulated Depreciation 107250 116250
Accounts Payable 31500 31500
Bank Loan 140000 140000
Contributed Capital 10000 10000
Additional Shares 3000
Retained Earnings 26750 26750
Service Revenue 382500 382500
Unbilled Revenue 8100
Advertisement Expenses 100000 100000
Salary Expense 185000 185000
Insurance Expense 20075 21900
Depreciation Expense 8250 17250
Interest Expenses 500
Interest Payable 500
Total 698000 698000 719925 719925

2

Counter Point Studies Inc
Statement of Earnings For year ended November 2019
$ $
Revenue
Service Revenue 382500
Unbilled Revenue 8100 390600
Expenditure
Advertisement Expenses 116250
Salary Expense 31500
Insurance Expense 140000
Depreciation Expense 10000
Interest Expenses 3000 300750
Earnings For the year 89850

3

Counter Point Studies Inc
Statement Of Change in Equity
$
Contributed Capital (Beginning of the year) 10000
Add : Additional Shares issued 3000
Sub Total (A) 13000
Retained Earnings (Beginning of the year) 26750
Add : Earnings for the year 89850
Sub Total (B) 116600
Total Equity (A+B) 129600

ekkarill92 answered 1 year ago
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