Internet Consulting Service, Inc., adjusts its accounts every month. The company's year-end unad- justed trial balance dated December 31,...

 

 

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Internet Consulting Service, Inc., adjusts its accounts every month. The company's year-end unad- justed trial balance dated December 31, 2018 follows. (Bear in mind that adjusting entries already have been made for the first 11 months of 2018, but have not been made for December.) Other Data 1. On December 1, the company signed a new rental agreement and paid three months' rent in advance at a rate of $2,100 per month. This advance payment was debited to the Prepaid Office Rent account. 2. Dues and subscriptions expiring during December amounted to $50. 3. An estimate of supplies on hand was made at December 31; the estimated cost of the unused supplies was $450. 4. The useful life of the equipment has been estimated at five years (60 months) from date of acquisition. 5. Accrued interest on notes payable amounted to $100 at year-end. (Set up accounts for Interest Expense and for Interest Payable.) 6. Consulting services valued at $2,850 were rendered during December to clients who had made payment in advance. 7. It is the custom of the firm to bill clients only when consulting work is completed or, in the case of prolonged engagements, at monthly intervals, At December 31, consulting services valued at $11,000 had been rendered to clients but not yet billed. No advance payments had been received from these clients. INTERNET CONSULTING SERVICE, INC. UNADJUSTED TRIAL BALANCE DECEMBER 31, 2018 $ 49.100 Cash Consulting fees receivable 23,400 Prepaid office rent 6.300 Prepaid dues and subscriptions 300 Supplies.. 600 Equipment 36,000 Accumulated depreciation: equipment $ 10,200 ....... Notes payable 5,000 ..... Income taxes payable 12,000 Unearned consulting fees.. 5,950 Capital stock 30,000 Retained earnings 32,700 Dividends 60,000 Consulting fees eamed 257,180 Salaries expense 88820 Telephone expense 2,550 Rent expense 22.000 Income taxes expense 51,000 Dues and subscriptions expense 560 Supplies expense.. 1,600 Depreciation expense equipment 6.600 4.200 $353.030 Miscellaneous expenses $353.030 8. Salaries carned by employees but not paid as of December 31 amount to S1.700. 9. Income taxes expense for the year is estimated at $56,000. Of this amount, $51,000 has been recognized as expense in prior months, and $39,000 has been paid to tax authorities. The company plans to pay the $17.000 remainder of its income tax liability on January 15. Instructions a. Prepare the necessary adjusting journal entries on December 31, 2018. b. Determine the amounts to be reported in the company's year-end adjusted trial balance for cach of the following accounts. Consulting Fees Earned Salaries Expense Telephone Expense Rent Expense Supplies Expense Dues and Subscriptions Expense Depreciation Expense: Equipment Miscellancous Expenses Interest Expense Income Taxes Expense c. Determine the company's net income for the year ended December 31, 2018. (Hint: Use the amounts determined in part b.)

Answer rating: 100% (QA)

Worksheet Unadjusted Adjustments Adjusted Income Statement Balance Sheet Account Titles Debit Credit View the full answer