Kevin Steven opened a small tax-preparation service. Steven Tax Services trial balance at the end of its
Question:
Kevin Steven opened a small tax-preparation service. Steven Tax Service’s trial balance at the end of its second year of operation is as follows.
The following information is also available:
a. Office supplies on hand, December 31, 2014, $227
b. Insurance still unexpired, $120
c. Estimated depreciation of office equipment, $770
d. Telephone expense for December, $19; the bill was received but not recorded.
e. The services for all unearned tax fees had been performed by the end of the year.
REQUIRED
1. Open T accounts for the accounts in the trial balance plus the following: Office Supplies Expense; Insurance Expense; and Depreciation Expense—Office Equipment. Record the balances shown in the trial balance.
2. Determine the adjusting entries and post them directly to the T accounts.
3. Prepare an adjusted trial balance, an income statement, a statement of owner’s equity, and a balance sheet. The owner made no investments during the period.
4. Why is it not necessary to show the effects of the above transactions on the statement of cashflows?
Steven Tax Service Trial Balance December 31, 2014 Cash Accounts Receivable Prepaid Insurance Office Supplies Office Equipment Accumulated Depreciation-Office Equipment Accounts Payable Unearned Tax Fees K. Steven, Capital K. Steven, Withdrawals Tax Fees Revenue Office Salaries Expense Advertising Expense Rent Expense Telephone Expense 2,268 1,031 240 782 7,100 770 635 219 5,439 6,000 21,926 8,300 650 2,400 218 28,989 28,989
Step by Step Answer:
1 and 2 Cash Accounts Receivable Prepaid Insurance Bal 2268 Bal 1031 Bal 240 b 120 Bal 120 Accumulated Depreciation x Office Supplies Office Equipment ...View the full answer
Principles of Accounting
ISBN: 978-1133626985
12th edition
Authors: Belverd E. Needles, Marian Powers and Susan V. Crosson
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A trial balance is a list of all the general ledger accounts contained in the ledger of a business. This list will contain the name of each nominal ledger account and the value of that nominal ledger balance. Each nominal ledger account will hold either a debit balance or a credit balance
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