Flint, Inc., operates a cable television system. At December 31, 2009, the following unadjusted account balances were
Question:
Flint, Inc., operates a cable television system. At December 31, 2009, the following unadjusted account balances were available:
Cash ...................... $ 2,000
Accounts Receivable ............... 89,000
Office Supplies .................. 5,000
Land ......................$ 37,000
Building .................... 209,000
Accumulated Depreciation, Building ........... 40,000
Equipment .................... 794,000
Accumulated Depreciation, Equipment ........... 262,000
Other Assets ................... 19,700
Accounts Payable ................. 29,500
Notes Payable (due in 2013) ............ 250,000
Common Stock ................. 300,000
Retained Earnings, 12/31/2008 ........... 14,700
Dividends ................... 28,000
Service Revenue .................. 985,000
Subscription Expense ................ 398,000
Telephone Expense ................ 10,500
Utilities Expense ................. 34,000
Wages Expense ................. 196,000
Miscellaneous Expense .............. 44,000
Interest Expense .................. 15,000
The following data are available for adjusting entries:
a. At year-end $1,500 of office supplies remain unused.
b. Annual depreciation on the building is $20,000.
c. Annual depreciation on the equipment is $150,000.
d. The interest rate on the note is 8 percent. Four months’ interest is unpaid and unrecorded at December 31, 2009.
e. At December 31, 2009, service revenue of $94,000 has been earned but is unbilled and unrecorded.f. Utility bills of $2,800 are unpaid and unrecorded at December 31, 2009.
g. The income tax rate is 25 percent.
Required:
1. Prepare a worksheet for Flint.
2. Prepare an income statement, a statement of changes in retained earnings, and a classified balance sheet for Flint.
3. Prepare the closing entries.
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
Cornerstones of Financial and Managerial Accounting
ISBN: 978-0324787351
1st Edition
Authors: Rich Jones, Mowen, Hansen, Heitger