Question

*Answer all of the questions, they are all necessary.

Prepare Adjusting Entries

1. Panda Corporation paid cash of $144,000 on June 1, 2020 for one year’s rent in advance and recorded the transaction with a debit to Prepaid Rent.
   • Prepare the December 31, 2020 adjusting entry
     1. (Clearly show debit and credit – debits are left and credits are right
     2. Do a journal entry
2. During the first year of Wilkinson Co.'s operations, all purchases were recorded as assets. Supplies in the amount of $28,800 were purchased. Actual year-end supplies amounted to $6,600.
   • Prepare the December 31^st adjusting entry
     1. (Clearly show debit and credit – debits are left and credits are right
     2. Follow the “Journal Entry”

3. Create a Financial Planner. The adjusted trial balance of Ryan Financial Planners appears below.

Using the information from the adjusted trial balance, you are to prepare for the month ending December 31, 2020:

• Remember, Assets = Liabilities + Stockholder’s Equity

         1.      an income statement.

         2.      a retained earnings statement.

         3.      a balance sheet.

                                                                                                                    Debit                  Credit

Cash                                                                      .............................      $ 4,900

Accounts Receivable..........................................................................          2,200

Supplies.............................................................................................          1,800

Equipment .........................................................................................        20,000

Accumulated Depreciation—Equipment..........................................                                 $ 5,000

Accounts Payable..............................................................................                                     3,800

Unearned Service Revenue...............................................................                                     5,000

Common Stock..................................................................................                                   11,000

Retained Earnings..............................................................................                                     4,400

Dividends...........................................................................................          2,000

Service Revenue................................................................................                                     8,700

Supplies Expense...............................................................................             600

Depreciation Expense........................................................................          3,500

Rent Expense.....................................................................................          2,900               ______

                                                                                                                 $37,900              $37,900

1.                                                RYAN FINANCIAL PLANNERS

Income Statement

For the Month Ended December 31, 2020

2.                                                RYAN FINANCIAL PLANNERS

Retained Earnings Statement

For the Month Ended December 31, 2020

3.                                                RYAN FINANCIAL PLANNERS

Balance Sheet

December 31, 2020

Assets

Liabilities and Stockholders’ Equity

Answer 1

Answer:
Adjusting Entry

	Dr	Cr
Prepaid Rent	144000
To Cash Account		144000
(Being advance rent paid for one year or 12 months )
Adjustment entry for December month
Rent Expense Account	12000
To Prepaid Rent		12000
(Being adjustment made for rent expense for the month of Dec. 31, 2020 is accounted on accrual basis) [Rent Exp = 144000/12 months x 1 month]
Asset Account	28800
To Cash Account		28800
(Being entry for supplies purchased, but wrongly debited to asset account)
Supplies Account	28800
To Asset Account		28800
(Being adjustment made for wrong entry)
Supplies Expenses Account	6600
To Supplies Account		6600
(Being actual supplies expense incurred)

Income Statement
Revenue
Service Revene	8,700.00
Total Revenue	8,700.00
Expenses
Supplies Expense	600.00
Depreciation Expense	3,500.00
Rent Expense	2,900.00
Dividend	2,000.00
Net Income	-300.00

Retained Earnings
Opening Balance	4,400.00
Less: Net Loss	-300.00
	4,100.00

Balance Sheet
Assets
Current Assets
Cash		4,900.00
Account Receivable		2,200.00
Supplies		1,800.00
Non-current Assets
Equipment	20,000.00
Less:Accum. Depreciation	-5,000.00
		15,000.00
Total Assets		23,900.00
Liabilities and Owner's Equity
Current Liabilities
Account Payable		3,800.00
Unearned Revenue		5,000.00
Onwer's Equity
Common Stock		11,000.00
Retained Eanings		4,100.00
Total Liabilities		23,900.00