i. The random order account balances (in $) shown here are from the Trial Balance of Slippery Slope,Inc.

dated December 1, 2020. Unexpired Insurance, 2,800; Depreciation Expense: Building, 11,000;

Accounts Receivable, 40,000; Accounts Payable, 21,000; Retained Earnings, 18,000; Unearned

Revenue, 8,000; Accumulated Depreciation: Building, 40,000; Salaries Expense, 18,600; Capital

Stock, 35,000; Cash, 52,400; Office Supplies, 8,200; Rent Expense, 24,000; Prepaid Rent, 3,000;

Income Taxes Expense, 3,000; Interest Payable, 2,950; Building, 60,000; Office Supplies Expense,

11,700; Insurance Expense, 5,000; Service Revenue, 95,150; Income Taxes Payable, 3,000; Interest

Expense, 7,400, Note Payable, 24,000.

ii. The company engaged in different transactions during December 2020. On December 02, Slippery

Slope issued 5,000 more shares of capital stock for $20 per share. Accounts payable was partially Settled on December 13, by paying $10,200 cash while on the same date collected accounts receivable

In full. A newspaper advertisement was placed on December 18 to be published on December 25 Issue. The cost of the advertisement was $1,530 and payment was due in 30 days. On December 25,

Purchased office equipment of $120,000 from Jalil Enterprises by paying 50% in cash and promising

To settle the remaining balance in 90 days. Office equipment of $25,000 was, however, returned on December 28. Return of this equipment reduced the amount owed to Jalil Enterprises. Services were Provided to Zapta, Inc. on December 30 for $2,500 and the entire amount was collected on that date.

iii. Detailed analysis of record further showed that the building and office equipment is being depreciated over 5 years. Office supplies on hand on December 31, 2020, amounted to $4,100.

The Rent payment policy of the company is to pay it in advance at the start of each quarter. The most recent

Advance payment of $9,000 was made on October 1, 2020. Salaries earned by employees during the Month but not yet recorded or paid amounted to $1,700. The company borrowed $24,000 from a Bank on July 1, 2020, @ 8% per annum by signing a 12-month promissory note. The entire note and Interest is due on June 30, 2021. Moreover, the company paid $4,800 on July 01, 2020, to renew its 12-month insurance policy. The record further depict that $8,000 of previously unearned revenue Has been earned on December 31, 2020, while it was estimated that the accrued income taxes expense

The entire year ending December 31, 2020 totals 3,900. The full amount is due early in 2021.

Required:

a) On the basis of information given in part (ii), record the company’s December transactions in General journal form. Include a brief explanation of the transaction as part of each journal entry. Also, post the transactions to appropriate ledger accounts by using the T-account format.

Furthermore, by using the information of parts (i) and (ii) above, prepare an unadjusted trial Balance of Slippery Slope, Inc. dated December 31, 2020.

b) By using the information given in part (iii), prepare the necessary adjusting entries. Include A brief explanation as part of each adjusting entry. If no entry is required, explain why? Moreover, Prepare an adjusted trial balance dated December 31, 2020.

c) From the adjusted trial balance, prepare an income statement and a statement of retained earnings For the year ended December 31, 2020. Furthermore, prepare a balance sheet in account format on December 31, 2020, by using the above information.

d) Prepare necessary year-end closing entries and an after-closing trial balance dated December 31, 2020.

e) Indicate the effect of each of the general and adjusting entries on major elements of the Income Statement and Balance Sheet. Use the code letters I for increase, D for decrease, and NE for no Effect. Organize your answer in tabular form using the column headings shown below:

Income Statement ____ Balance Sheet_____________

Transaction Revenue – Expenses = Net Income Assets = Liabilities + Owner’s Equity

f) Was the monthly rent expense of the company for the last 3 months of 2020 more or less than the First 09 months of the year? Explain your answer.

g) How much was the company’s average monthly insurance expense from January through June of 2020? Explain your answer.

Answer rating: 100% (QA)

Journal Entries Date Account Debit Credit Explanation Dec 2 Cash 100000 Capital Stock Issued 5000 shares of capital stock for 20 per share Dec 13 Accounts Payable 10200 Cash Partially settled accounts ... View the full answer