Question

Prepare in good form: an Income Statement, Statement of Owner’s Equity 2. Classified Balance Sheet, 3. Calculate the Current Ratio and prepare the Closing Entries in a general journal Question #1 – 35 Marks The following is the adjusted trial balance for Reid Tax and Accounting Services for the year ended December 31, 2017 Reid Tax and Accounting Services Adjusted Trial Balance December 31, 2017 Account Title Dr Cr Accounts payable 6,300 Accounts Receivable 9,000 Accumulated Depreciation Building 41,000 Accumulated Depreciation Equipment $4,200 Building 350,000 Cash $98,000 Depreciation expense, building 7,000 Depreciation expense, equipment 800 Insurance expense 5,200 Interest payable 2,000 Land 700,000 Long-term note payable 52,000 Fred Reid, Capital 1,010,000 Fred Reid, Withdrawals 200,500 Office equipment 8,000 Office supplies 3,300 Prepaid Insurance 9,000 Prepaid Rent 15,000 Rent expense 6,000 Salaries expense 89,000 Salaries payable 14,500 Service fees earned 370,800 Totals $1,500,800 $1,500,800 Additional Information: • A $10,000 installment on the long-term note payable is due within one year. • Fred Reid invested $40,000 into her business during the year Required: 1. Prepare in good form, an Income Statement, Statement of Owner’s Equity and a Classified Balance Sheet for the year ended December 31, 2017. – 26 Marks 2. Calculate the Current Ratio at December 31, 2017 – 4 Marks 3. Prepare the Closing Entries at December 31, 2017.in a general journal – 5 Marks

Answer 1