(Learning Objectives 3, 4: Computing fi nancial statement amounts) The accounts of Greatbrook Company prior to the year-end adjustments follow.

Adjusting data at the end of the year include which of the following?

a. Unearned service revenue that has been earned, $1,620

b. Accrued service revenue, $32,000

c. Supplies used in operations, $3,600

d. Accrued salary expense, $3,200

e. Prepaid insurance expired, $1,200

f. Depreciation expense—building, $2,500 Rorie Lacourse, the principal shareholder, has received an offer to sell Greatbrook Company.
He needs to know the following information within one hour:

a. Net income for the year covered by these data

b. Total assets

c. Total liabilities

d. Total shareholders’ equity

e. Prove that Total assets = Total liabilities + Total shareholders’ equity after all items are updated.
❙ Requirement 1. Without opening any accounts, making any journal entries, or using a work sheet, provide Mr. Lacourse with the requested information. The business is not subject to income tax.
Practice Quiz Test your understanding of accrual accounting by answering the following questions. Select the best choice from among the possible answers given.