Adjusted Trial Balance of Smart Company as at December 31, 2020 is shown below: Smart Company...

 

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Adjusted Trial Balance of Smart Company as at December 31, 2020 is shown below: Smart Company Adjusted Trial Balance December 31, 2020 Cash Accounts receivable Supplies Prepaid insurance Machinery Accumulated depreciation - Machinery Unearned revenue Salary payable Share capital Retained earnings Dividends Sales revenue Insurance expense Salary expense Miscellaneous expense Depreciation expense Total Debit $ 15,300 5,850 360 700 2,600 500 120 6,210 340 460 $32,440 Credit S 1,650 10,000 400 5,200 1,940 13.250 $32,440 Required: (a) Prepare the Income Statement of Smart Company for the year ended December 31, 2020. (7 marks) (b) Prepare the Statement of Retained Earnings of Smart Company for the year ended December 31, 2020. (4 marks) (c) Prepare the Statement of Financial Position of Smart Company as at December 31, 2020. (11 marks) (d) Prepare the necessary closing entries for Smart Company at December 31, 2020, (Explanation of Journal Entry is not required.) (11 marks) Benson Company adjusts it account at the end of each year. The following information concerns the adjusting entries to be recorded as of December 31: i. The Office Supplies account started the year with a $6,000 debit balance. During the year, the company purchased supplies for $13,400, which was added to the Office Supplies account. A December 31 physical count shows $2,554 of supplies remaining. ii. The company purchased a building two years ago for $960,000. The building's estimated useful life at the time of the purchase was 30 years. iii. The Prepaid Insurance account had a $20,000 debit balance at December 31 before adjusting for the costs of any expired coverage for the year. An analysis of prepaid insurance shows that $12,680 of unexpired insurance coverage remains at year-end. iv. Since the company is not large enough to occupy the entire building it owns, on November 1, the company rented space to a tenant for $3,800 per month. The tenant paid five months' rent in advance on that date. The payment was recorded with a credit to the Unearned Revenue account. Assume no other adjusting entries are made during the year. v. The company has 15 employees, who earn a total of $1,960 in salaries each working day. They are paid each Monday for their work in the five-day workweek ending on the previous Friday. Assume that December 31 is a Tuesday, and all 15 employees worked the first two days of that week. Because New Year's Day is a paid holiday, they will be paid salaries for five full days on Monday, January 6 of next year. Required: (a) Use the information to prepare adjusting entries as of December 31. (Explanation of Journal Entry is not required) (20 marks) (b) Assume the profit after the adjusting entries on (a) was $84,514. Determine the profit of Benson Company BEFORE these adjustments on (a). Show workings. (8 marks) (e) Prepare journal entries to record the first subsequent cash transaction in January of the next year for parts (v). (Explanation of Journal Entry is not required) (9 marks) Adjusted Trial Balance of Smart Company as at December 31, 2020 is shown below: Smart Company Adjusted Trial Balance December 31, 2020 Cash Accounts receivable Supplies Prepaid insurance Machinery Accumulated depreciation - Machinery Unearned revenue Salary payable Share capital Retained earnings Dividends Sales revenue Insurance expense Salary expense Miscellaneous expense Depreciation expense Total Debit $ 15,300 5,850 360 700 2,600 500 120 6,210 340 460 $32,440 Credit S 1,650 10,000 400 5,200 1,940 13.250 $32,440 Required: (a) Prepare the Income Statement of Smart Company for the year ended December 31, 2020. (7 marks) (b) Prepare the Statement of Retained Earnings of Smart Company for the year ended December 31, 2020. (4 marks) (c) Prepare the Statement of Financial Position of Smart Company as at December 31, 2020. (11 marks) (d) Prepare the necessary closing entries for Smart Company at December 31, 2020, (Explanation of Journal Entry is not required.) (11 marks) Benson Company adjusts it account at the end of each year. The following information concerns the adjusting entries to be recorded as of December 31: i. The Office Supplies account started the year with a $6,000 debit balance. During the year, the company purchased supplies for $13,400, which was added to the Office Supplies account. A December 31 physical count shows $2,554 of supplies remaining. ii. The company purchased a building two years ago for $960,000. The building's estimated useful life at the time of the purchase was 30 years. iii. The Prepaid Insurance account had a $20,000 debit balance at December 31 before adjusting for the costs of any expired coverage for the year. An analysis of prepaid insurance shows that $12,680 of unexpired insurance coverage remains at year-end. iv. Since the company is not large enough to occupy the entire building it owns, on November 1, the company rented space to a tenant for $3,800 per month. The tenant paid five months' rent in advance on that date. The payment was recorded with a credit to the Unearned Revenue account. Assume no other adjusting entries are made during the year. v. The company has 15 employees, who earn a total of $1,960 in salaries each working day. They are paid each Monday for their work in the five-day workweek ending on the previous Friday. Assume that December 31 is a Tuesday, and all 15 employees worked the first two days of that week. Because New Year's Day is a paid holiday, they will be paid salaries for five full days on Monday, January 6 of next year. Required: (a) Use the information to prepare adjusting entries as of December 31. (Explanation of Journal Entry is not required) (20 marks) (b) Assume the profit after the adjusting entries on (a) was $84,514. Determine the profit of Benson Company BEFORE these adjustments on (a). Show workings. (8 marks) (e) Prepare journal entries to record the first subsequent cash transaction in January of the next year for parts (v). (Explanation of Journal Entry is not required) (9 marks)