Question

JC’s Company’s unadjusted and adjusted trial balances at

December 31, 2017, follow.

Unadjusted trial Balance

	DR	CR
Cash	105,000
Prepaid Rent	60,000
Supplies	38,000
Office furniture	460,000
Accumulated dep office furniture		92,000
Accounts payable		102,500
Salaries payable
Unearned service revenue		15,900
SWT, Capital		453,000
SWT, Drawing	15,400
Service revenue		205,000
Salaries expense	110,000
Depreciation expense
Supplies Expense
Rent Expense	80,000
	868,400	868,400

Adjusted Trial Balance

		DR	CR
Cash		105,000
Prepaid Rent		20,000
Supplies		19,500
Office furniture		460,000
Accumulated dep office furniture			138,000
Accounts payable			102,500
Salaries payable			30,000
Unearned service revenue			5,500
SWT, Capital			453,000
SWT, Drawing		15,400
Service revenue			215,400
Salaries expense		140,000
Depreciation expense		46,000
Supplies Expense		18,500
Rent Expense		120,000
		944,400	944,400

Requirement:

Journalize the adjusting entries that account for the differences between the two

trial balances and provide a brief narration for each entry recorded.

Prepare the income statement for the year ended December 31, 2017

Prepare the owner’s equity statement for December 31, 2017

Prepare the balance sheet as at December 31, 2017

Answer 1

Journal Entry
S. No.	Detail	Debit	Credit
a.	Rent Expense	$40,000.00
	Prepaid Rent		$40,000.00
	Being Rent expense booked and adjusted Prepaid rent
b.	Supplies Expense	$18,500.00
	Supplies		$18,500.00
	Being Supplies Consumed
c.	Depreciation Expense	$46,000.00
	Accumulated Depreiciation on Office Furniture		$46,000.00
	( Being Deprecation expenses Booked)
d.	Salaries Expense	$30,000.00
	Salaries Payable		$30,000.00
	( Being Salaries Expenses booked)
e.	Unearned Service Revenue	$10,400.00
	Service Revenue		$10,400.00
	( Being Service revenue booked and adjusted from Unearned revenue)
	Income Statement for the Yead ended Dec 31,2017
	Service Revenue		$215,400
	Salaries Expense	$140,000
	Rent Expense	$120,000
	Supplies Expense	$18,500
	Depreciation Expense	$46,000	-$324,500
	Net Income (Loss)		-$109,100
	Owner Equity Statement as on the Yead ended Dec 31,2017
	SWT Capital	$453,000
	SWT Drawing	-$15,400	$437,600
	Net Income/(Loss) for the year		-$109,100.00
	total Owner's Equity		$328,500
	Balance Sheet for Year ended on 31st Dec 2017
	Assets
	Current Asset
	Cash	$105,000.00
	Prepaid Rent	$20,000.00
	Supplies	$19,500.00
	Total Current Asset		$144,500.00
	Property, Plant & Equipment
	Office Furniture	$460,000.00
	Less: Accumulated Depreciation	$138,000.00	$322,000.00
	Total Asset		$466,500.00
	Liability & Equity
	Current Liabilities
	Account Payable	$102,500.00
	Salaries Payable	$30,000.00
	Uneraned Service Revenue	$5,500.00	$138,000.00
	Total Liabilities		$138,000.00
	SWT Equity
	Capital	$453,000.00
	Drawing	-$15,400.00	$437,600.00
	net Income /(Loss)		-$109,100.00
	Total Equity		$328,500.00
	Total Liability & Equity		$466,500.00