The unadjusted trial balance of Stone Park Services, Inc., at January 31, 2019, does not balance. The
Question:
The unadjusted trial balance of Stone Park Services, Inc., at January 31, 2019, does not balance. The list of accounts and their balances follows. The trial balance needs to be prepared and adjusted before the financial statements at January 31, 2019, can be prepared. The manager of Stone Park Services also needs to know the business’s current ratio.
Requirements
1. How much out of balance is the trial balance? Notes Payable (the only error) is understated.
2. Stone Park Services needs to make the following adjustments at January 31:
a. Supplies of $400 were used during January.
b. The balance of prepaid rent was paid on January 1 and covers the entire calendar year of 2019. No adjustment was made on January 31.
c. At January 31, Stone Park Services owed employees $1,000.
d. Unearned service revenue of $500 was earned during January.
Prepare a corrected, adjusted trial balance. Give Notes Payable its correct balance.
3. After the error is corrected and after these adjustments are made, calculate and analyze the current ratio of Stone Park Services, Inc. Analyze this current ratio.
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
Financial Accounting
ISBN: 978-0134725987
12th edition
Authors: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.