The pre-closing balances in the T-accounts of Chang Company at the end of the third year of operations follow. The current year’s adjusting entries are identified by letters.

Required:
1. Develop three trial balances for Chang Company using the following format:

2. Write an explanation for each adjusting entry.
3. Record the closing journal entry at the end of the current year.
4. What was the average income tax rate for the current year?
5. What was the average issue (sale) price per share of the common stock?

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Cash Bal. 25,000 Maintenance Supplies Bal. 800 (a) Service Equipment Bal. 90,000 Accumulated Depreciation 500 Remaining Assets Bal. 44,800 Bal. 21,000 (d) 9,000 Note Payable (6% interest rate) Bal. 10,000 (c) Interest Payable (b) 600 Income Taxes Payable () 13,020 Wages Payable T(e) 400 Unearned Revenue 10,000 Bal. 13,600 Common Stock (10,000 shares) Bal. 10,000 Additional Paid-in Capital (e) S Retained Earnings Bal. 40,000 Bal. 160,000 (a) (b) (d) Service Revenue Bal. 12,000 Bal. 214,000 (c) 10,000 Expenses 500 600 9,000 400 13,020