Internet Consulting Service, Inc., adjusts its accounts every month. The company's year-end unad- justed trial balance...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Internet Consulting Service, Inc., adjusts its accounts every month. The company's year-end unad- justed trial balance dated December 31, 2018 follows. (Bear in mind that adjusting entries already have been made for the first 11 months of 2018, but have not been made for December.) Other Data 1. On December 1, the company signed a new rental agreement and paid three months' rent in advance at a rate of $2,100 per month. This advance payment was debited to the Prepaid Office Rent account. 2. Dues and subscriptions expiring during December amounted to $50. 3. An estimate of supplies on hand was made at December 31; the estimated cost of the unused supplies was $450. 4. The useful life of the equipment has been estimated at five years (60 months) from date of acquisition. 5. Accrued interest on notes payable amounted to $100 at year-end. (Set up accounts for Interest Expense and for Interest Payable.) 6. Consulting services valued at $2,850 were rendered during December to clients who had made payment in advance. 7. It is the custom of the firm to bill clients only when consulting work is completed or, in the case of prolonged engagements, at monthly intervals, At December 31, consulting services valued at $11,000 had been rendered to clients but not yet billed. No advance payments had been received from these clients. INTERNET CONSULTING SERVICE, INC. UNADJUSTED TRIAL BALANCE DECEMBER 31, 2018 $ 49.100 Cash Consulting fees receivable 23,400 Prepaid office rent 6.300 Prepaid dues and subscriptions 300 Supplies.. 600 Equipment 36,000 Accumulated depreciation: equipment $ 10,200 ....... Notes payable 5,000 ..... Income taxes payable 12,000 Unearned consulting fees.. 5,950 Capital stock 30,000 Retained earnings 32,700 Dividends 60,000 Consulting fees eamed 257,180 Salaries expense 88820 Telephone expense 2,550 Rent expense 22.000 Income taxes expense 51,000 Dues and subscriptions expense 560 Supplies expense.. 1,600 Depreciation expense equipment 6.600 4.200 $353.030 Miscellaneous expenses $353.030 8. Salaries carned by employees but not paid as of December 31 amount to S1.700. 9. Income taxes expense for the year is estimated at $56,000. Of this amount, $51,000 has been recognized as expense in prior months, and $39,000 has been paid to tax authorities. The company plans to pay the $17.000 remainder of its income tax liability on January 15. Instructions a. Prepare the necessary adjusting journal entries on December 31, 2018. b. Determine the amounts to be reported in the company's year-end adjusted trial balance for cach of the following accounts. Consulting Fees Earned Salaries Expense Telephone Expense Rent Expense Supplies Expense Dues and Subscriptions Expense Depreciation Expense: Equipment Miscellancous Expenses Interest Expense Income Taxes Expense c. Determine the company's net income for the year ended December 31, 2018. (Hint: Use the amounts determined in part b.) Internet Consulting Service, Inc., adjusts its accounts every month. The company's year-end unad- justed trial balance dated December 31, 2018 follows. (Bear in mind that adjusting entries already have been made for the first 11 months of 2018, but have not been made for December.) Other Data 1. On December 1, the company signed a new rental agreement and paid three months' rent in advance at a rate of $2,100 per month. This advance payment was debited to the Prepaid Office Rent account. 2. Dues and subscriptions expiring during December amounted to $50. 3. An estimate of supplies on hand was made at December 31; the estimated cost of the unused supplies was $450. 4. The useful life of the equipment has been estimated at five years (60 months) from date of acquisition. 5. Accrued interest on notes payable amounted to $100 at year-end. (Set up accounts for Interest Expense and for Interest Payable.) 6. Consulting services valued at $2,850 were rendered during December to clients who had made payment in advance. 7. It is the custom of the firm to bill clients only when consulting work is completed or, in the case of prolonged engagements, at monthly intervals, At December 31, consulting services valued at $11,000 had been rendered to clients but not yet billed. No advance payments had been received from these clients. INTERNET CONSULTING SERVICE, INC. UNADJUSTED TRIAL BALANCE DECEMBER 31, 2018 $ 49.100 Cash Consulting fees receivable 23,400 Prepaid office rent 6.300 Prepaid dues and subscriptions 300 Supplies.. 600 Equipment 36,000 Accumulated depreciation: equipment $ 10,200 ....... Notes payable 5,000 ..... Income taxes payable 12,000 Unearned consulting fees.. 5,950 Capital stock 30,000 Retained earnings 32,700 Dividends 60,000 Consulting fees eamed 257,180 Salaries expense 88820 Telephone expense 2,550 Rent expense 22.000 Income taxes expense 51,000 Dues and subscriptions expense 560 Supplies expense.. 1,600 Depreciation expense equipment 6.600 4.200 $353.030 Miscellaneous expenses $353.030 8. Salaries carned by employees but not paid as of December 31 amount to S1.700. 9. Income taxes expense for the year is estimated at $56,000. Of this amount, $51,000 has been recognized as expense in prior months, and $39,000 has been paid to tax authorities. The company plans to pay the $17.000 remainder of its income tax liability on January 15. Instructions a. Prepare the necessary adjusting journal entries on December 31, 2018. b. Determine the amounts to be reported in the company's year-end adjusted trial balance for cach of the following accounts. Consulting Fees Earned Salaries Expense Telephone Expense Rent Expense Supplies Expense Dues and Subscriptions Expense Depreciation Expense: Equipment Miscellancous Expenses Interest Expense Income Taxes Expense c. Determine the company's net income for the year ended December 31, 2018. (Hint: Use the amounts determined in part b.)
Expert Answer:
Answer rating: 100% (QA)
Worksheet Unadjusted Adjustments Adjusted Income Statement Balance Sheet Account Titles Debit Credit ... View the full answer
Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
Posted Date:
Students also viewed these accounting questions
-
The Off-Campus Playhouse adjusts its accounts every month. Below is the companys un-adjusted trial balance dated September 30, 2011. Additional information is provided for use in preparing the...
-
The Off-Campus Playhouse adjusts its accounts every month. The following is the company's unadjusted trial balance dated September 30, current year. Additional information is provided for use in...
-
We should also bear in mind that in todays business-oriented world economy, the cultures themselves are being significantly affected by business activities and business practices. Comment.
-
Reset all of the assumptions to the original values. Then assess the sensitivity of the impairment test results by changing the following assumptions listed below. Assumption Name: Revised...
-
Graphite Discount Building Supplies Limited (Graphite) is a chain of large building supply stores. Graphite sells building supplies to individuals and small contractors and builders. Until recently,...
-
On January 1, 2020, Rocket Corporation issued \(\$ 250,000\) of \(6 \%, 20\)-year bonds at 98 . The interest is payable each December 31. Rocket uses straight-line amortization. The company's...
-
A business started its year owing 4,000 for electricity. During the year it paid electricity bills totalling 24,000 but owed 5,000 by the end of the period. What will be the figure transferred to the...
-
Refer to the information provided in P10-2A. P10-2A Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $0.01 par value common. As of the beginning of 2018, 300 shares of...
-
Question 6 A Points 2 is a record of transactions involving the use of credit which includes loans, credit cards, and other types of debts. credit card credit check
-
On January 1. Ruiz Company issued bonds as follows: Face Value: Number of Years: Stated Interest Rate: Interest payments per year 500,000 15 7% Required: 1) Calculate the bond selling price given the...
-
If a researcher rejected the Ho when it was in fact true, what have happened? Question 24 options: A) The researcher had made a correct decision B) The researcher committed a Type I error C) The...
-
SHOW WORKINGS: Suppose a Gatorade costs 25 euros in Finland and20 Singaporean dollars in Singapore. If the exchange rate is 1.25euros per Singaporean dollar, what is the real exchange rate?
-
If f(x)=10sin(x)+3cos(x), find a function g so that g"(x)=f(x) given that g(0)=0 and g(27)=12
-
Raymond B. Cattell was a psychologist who utilized thestatistical technique of factor analysis to determine underlyingpersonality traits. His definition of personality was very concise:personality is...
-
If a river is discharging at 9,000 cubic feet per second at itsdelta, calculate the rivers velocity if the width is 40 meters andthe depth is 3.5 meters. Please express your answer usingEnglish units...
-
1. At what point in Puppy do you begin to realize that Saunders's third person narrator might be speaking like or using the voice of his two main characters- first Marie, then Callie, and so on? How...
-
A retailer pays $110,000 rent each year for its two-story building. Space in this building is occupied by five departments as shown here. Department Jewelry Cosmetics Department Housewares Tools...
-
Chris Zulliger was a chef at the Plaza Restaurant in the Snowbird Ski Resort in Utah. The restaurant is located at the base of a mountain. As a chef for the Plaza, Zulliger was instructed by his...
-
The following information is from the manufacturing budget and the budgeted financial statements of Fabor Fabrication: Direct materials inventory, Jan. 1 . . . . . . . . . . . . . . . . . . . . . . ....
-
We have made the point that managers often attempt to maximize the contribution margin per unit of a particular resource that limits output capacity. The following are five familiar types of...
-
Conklin Corporation recorded the following activities during its first month of operations: Purchased materials costing $250,000. Used direct materials in production costing $230,000. Incurred...
-
a) Calculate the absolute difference and relative difference from this data. Sales Food Beverage Total Absolute Relative Year 1 Year 2 difference difference % 678,950 787,582 378,450 280,053...
-
What is the cash operating cycle and how is it calculated?
-
What are the key elements of working capital?
Study smarter with the SolutionInn App