January 1, 2017 January 1, 2018
Total Assets $427,000 $452,000
Total Liabilities 57,000 67,500
Retained Earnings ? ?
Common. Stock 115,000 115,000
What is the amount in Retained Earnings on January 1, 2017? (5 points)
What is the amount in Retained Earnings on January 1, 2018? (5 points)
What is the amount of Expenses during the year? (5 points)
Did the company report Net Income or Net Loss? Amount? (5 points)
Use the accounting equation to solve for unknown amounts. Show all your work.
Make the journal entries for the following: (20 points)
- Richard started a business and contributed $10,000 and a building valued at $50,000 in exchange for common stock.
- Earned $12,000 for service revenue. $6000 was received and the rest has not been paid.
- Purchased equipment for $6,000, $1000 down payment and the rest on account.
- Paid $600 for office supplies.
- Employees earned $1600 in wages each week. They are usually paid on Monday. But the week is from Friday to Thursday(the business is only open 5 days a week (M-F) and wages are the same each day). The year ends on Thursday. Be careful: when was the last time they were paid and how much in wages have they earned since then? You are making the journal entry to accrue all the wages since the last time they were paid.
- Cash dividends of $700 were paid to stockholders.
- Received a bill for $250 for the monthly utilities. The bill has not yet been paid.
Isaiah’s Automotive Services: Adjustment data at 12/31:
- On December 9, Isaiah’s Automotive Services was contracted to preform services for a client, receiving $10,000 in advance. The services are maintenance contract on a fleet. Record this. By 12/31, Isaiah had performed$2,000 on the maintenance contract. Record this Adjustment.
- Isaiah prepaid six months of rent on November 1 (Assume the Prepaid Rent balance as shown on the unadjusted trial balance represents the 6 months of rent prepaid on November 1).Make the adjusting entry.
- Isaiah purchased $600 in supplies on Dec. 10.
- Depreciation for the equipment was recorded. Assume the equipment has a residual value of $1,000 and Isaiah plans on using it 5 years. They have owned it 6 months of this year. Use straight-line.
- Isaiah received a bill for online advertising, $550. The Company will not pay for it until January.
- On 12/31, Isaiah had $800 in supplies. Don’t forget the purchases in part c.
- Journalize the transactions and adjusting entries.
- Prepare the Adjusted Trial Balance.
Isaiah’s Automotive Services
Unadjusted Trail Balance
December 31, 2018
|Office Supplies Inventory||1,600|
Isaiah’s Automotive Service
Adjusted Trail Balance
December 31, 2018
|Office Supplies Inventory|
Multiple Choice (20 points)_______________________________________________________
Accounting Equation (20 points)___________________________________________________
Journal Entries (20 points)________________________________________________________
Adjusting Journal Entries (20 points)________________________________________________
Adjusted Trial Balance (20 points)_______________________________________________