Penny Proud began operations as a private investigator on January 1, 2003. The trial balance columns of
Question:
Penny Proud began operations as a private investigator on January 1, 2003. The trial balance columns of the work sheet for Proud P.I. at March 31 are as follows.
Accounts Titles Debit Credit
Cash 11,400
Accounts Receivable 5,620
Supplies 1,050
Prepaid Insurance 2,400
Equipment 30,000
Notes Payable 10,000
Accounts Payable 12,350
P. Proud, Capital 20,000
P. Proud, Drawing 600
Service Revenue 13,620
Salaries Expense 2,200
Travel Expense 1,300
Rent Expense 1,200
Miscellaneous Expense 200 ______
TOTAL 55,970 55,970
OTHER DATA:
- Supplies on hand total $750
- Depreciation is $500 per quarter.
- Interest accrued on 6-month note payable, issued January 1, $300.
- Insurance expires at the rate of $150 per month
- Services provided but unbilled at March 31 total $750.
INSTRUCTIONS:
- Complete the work sheet.
- Prepare an income statement and owner’s equity statement for the quarter and a classified balance sheet at March 31. P. Proud did not make any additional investments in the business during the quarter ended March 31, 2003.
- Journalize the adjusting entries from the adjustments columns of the work sheet
- Journalize the closing entries from the financial statement columns of the work sheet.
CHART OF ACCOUNTS
CASH NOTES PAYABLE TRAVEL EXPENSE
ACCOUNTS RECEIVABLE INTEREST PAYABLE RENT EXPENSE
PREPAID INSURANCE PENNY PROUD, CAPITAL MISC. EXPENSE
SUPPLIES PENNY PROUD, DRAWING INTEREST EXPENSE
EQUIPMENT SERVICE REVENUE DEPRECIATION EXPENSE
ACCUM.DEPRE.- EQUIPMT SALARIES EXPENSE INSURANCE EXPENSE
ACCOUNTS PAYABLE SUPPLIES EXPENSE
Accounting Principles
ISBN: 978-1119048503
7th Canadian Edition Volume 1
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak