Martin Accounting Services, Inc. fills temporary accounting positions for local businesses in Billings MT. Some businesses...
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Martin Accounting Services, Inc. fills temporary accounting positions for local businesses in Billings MT. Some businesses pay in advance for services; others are billed after services have been performed. Advanced payments are credited to an account entitled Unearned Fees. Adjusting entries are performed on a monthly basis. An unadjusted trial balance dated December 31, 2020, follows: Cash Accounts receivable Unexpired insurance Prepaid rent Office supplies Equipment Accumulated Depr equipment Accounts payable Notes payable interest payable Unarrades Income taxes payable Unearned revenue Retained earnings Comman sterk Dividends Fees earned Travel expense Insurance expense Rent expense Office supplies expense Utilities expettive Depreciation expense equipment Salaries expense Interest expense income takes expense Totals Martin Accounting Services Unadusted Trial Balance December 31, 2020 27,020 59,200 900 3,000 600 60,000 3,000 5,000 2.900 9,900 780 4,800 5,500 300,0 320 12.000 29,500 4.180 12,000 320 6,000 4,000 20.000 49,000 25,000 75,000 225,000 225,000 Other Information: 1. Accrued but unrecorded fees earned as of December 31, 2020, amount to $1,500. 2 Records show that $2,500 of cash receipts originally recorded as unearned fees had been earned as of December 31. 3. The company purchased a six-month insurance policy on September 1, 2020, for $1,800. 4. On December 1, 2020, the company paid its rent through February 28, 2021. 5. Office supplies on hand at December 31 amount to $400. 6. All equipment was purchased when the business first formed. The estimated life of the equipment. t that time was 10 years (or 120 months). 7. On August 1, 2020, the company borrowed $12,000 by signing a six-month, 8 percent note payable. The entire note, plus six months' accrued interest, is due on February 1, 2021. Accrued but unrecorded salaries at December 31 amount to $2,700. 9, Estimated income taxes expense for the entire year totals $15,000 Taxes are due in the first. quarter of 2021 Required: A. For each of the above numbered paragraphs, prepare the necessary adjusting entry. B. Update the balances in the appropriate accounts affected by the adjusting journal entries and prepare an Adjusted Trial Balance. (posting to actual general ledger accounts is not required) Prepare an income statement and statement of retained earnings for the year ended December 31, 2020, and balance sheet as of December 31 2020. C. D. Prepare closing entries. E. Prepare a post closing trial balance as of December 31, 2020. Reminders: Use the four-line heading as described below: Your name: Bus 311, Intermediate Accounting I Assignment: Martin Accounting Services, Inc. Due date: September 11, 2020 (11:59 pm) Use commas as thousand separators (1,000,000) Do not include cents in any numbers Use S signs sparingly Use spellcheck and carefully proofread your solution Properly use underlines and double underlines (refer to the Excel Tips and Reminders worksheet for additional points) Martin Accounting Services, Inc. fills temporary accounting positions for local businesses in Billings MT. Some businesses pay in advance for services; others are billed after services have been performed. Advanced payments are credited to an account entitled Unearned Fees. Adjusting entries are performed on a monthly basis. An unadjusted trial balance dated December 31, 2020, follows: Cash Accounts receivable Unexpired insurance Prepaid rent Office supplies Equipment Accumulated Depr equipment Accounts payable Notes payable interest payable Unarrades Income taxes payable Unearned revenue Retained earnings Comman sterk Dividends Fees earned Travel expense Insurance expense Rent expense Office supplies expense Utilities expettive Depreciation expense equipment Salaries expense Interest expense income takes expense Totals Martin Accounting Services Unadusted Trial Balance December 31, 2020 27,020 59,200 900 3,000 600 60,000 3,000 5,000 2.900 9,900 780 4,800 5,500 300,0 320 12.000 29,500 4.180 12,000 320 6,000 4,000 20.000 49,000 25,000 75,000 225,000 225,000 Other Information: 1. Accrued but unrecorded fees earned as of December 31, 2020, amount to $1,500. 2 Records show that $2,500 of cash receipts originally recorded as unearned fees had been earned as of December 31. 3. The company purchased a six-month insurance policy on September 1, 2020, for $1,800. 4. On December 1, 2020, the company paid its rent through February 28, 2021. 5. Office supplies on hand at December 31 amount to $400. 6. All equipment was purchased when the business first formed. The estimated life of the equipment. t that time was 10 years (or 120 months). 7. On August 1, 2020, the company borrowed $12,000 by signing a six-month, 8 percent note payable. The entire note, plus six months' accrued interest, is due on February 1, 2021. Accrued but unrecorded salaries at December 31 amount to $2,700. 9, Estimated income taxes expense for the entire year totals $15,000 Taxes are due in the first. quarter of 2021 Required: A. For each of the above numbered paragraphs, prepare the necessary adjusting entry. B. Update the balances in the appropriate accounts affected by the adjusting journal entries and prepare an Adjusted Trial Balance. (posting to actual general ledger accounts is not required) Prepare an income statement and statement of retained earnings for the year ended December 31, 2020, and balance sheet as of December 31 2020. C. D. Prepare closing entries. E. Prepare a post closing trial balance as of December 31, 2020. Reminders: Use the four-line heading as described below: Your name: Bus 311, Intermediate Accounting I Assignment: Martin Accounting Services, Inc. Due date: September 11, 2020 (11:59 pm) Use commas as thousand separators (1,000,000) Do not include cents in any numbers Use S signs sparingly Use spellcheck and carefully proofread your solution Properly use underlines and double underlines (refer to the Excel Tips and Reminders worksheet for additional points)
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1 Adjusted Entries 2 Adjusted Trial Balance n 3 Income Statement 4 Statement of Retained Earnings 5 ... 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:
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