The unadjusted trial balance for ABC Inc is provided below.

Use it in conjunction with the notes provided below to prepare a multi-step income statement, equity statement, and classified balance sheet. Prepare journal entries to show the accounting treatment for each of the adjustments below .

abc inc
Unadjusted Trial Balance
For the year ended December 31, 2015

	Debit	Credit
Money	300.000
accounts receivable	400.000
Inventory	200,000
prepaid insurance	100,000
Equipment	2,000,000
Accumulated Depreciation—Equipment		800.000
Tierra	500,000
Notes payable (long term)		200,000
Accounts payable		300.000
Unearned service income		150.000
owner's equity		600.000
Retained earnings		400.000
sales revenue		3,000,000
cost of goods sold	1,500,000
selling expenses	300.000
Administration expenses	200,000
Interest income		150.000
Loss on sale of fixed assets	100,000
	5,600,000	5,600,000

The following settings were provided

1. Fees of $50,000 received in advance during the year were erroneously recorded in Sales revenue.

2. Earned $100,000 recorded as unearned service during the year

3. Prepaid insurance expired during the year $50,000. (Administration expenses)

4. The equipment is expected to last 6 years. Salvage value is $200,000 (CoGS)

5. Office salaries and salaries earned but not recorded and not paid as of December 31, 2015, $50,000. (Administration expenses)

6. A physical inventory count on 12/31/2015 shows $50,000 remaining. (CoGS)

7. Provide a $50,000 Bad Debt Allowance (Sale)

8. Provide income taxes of 20% of income before taxes

9. Dividends of 100,000 were declared (but not paid) for the year.

Answer rating: 100% (QA)

EQUITY STATEMENT CALCULATIONS Owners Equity Retained Earnings Beginning 600000 From the unadjusted trial balance Add Net Income Net Income Sales Revenue Cost of Goods Sold Selling Expenses Administrat... View the full answer