Other data:

Accrued but unrecorded and uncollected consulting fees earned at December 31 amount to: $27500.

The company determined that $16500 of previously unearned consulting fees had been earned at December 31.

Office supplies on hand at December 31 total $330

The company purchased all of its equipment when it first began business. At that time, the estimated useful life of the equipment was six years.

The company prepaid its nine-month rent agreement on June 1, 2020.

The company prepaid its six-month insurance policy on December 1, 2020

Accrued but unpaid salaries total $13200 at December 31,2020.

On September 1, 2020, the company borrowed $66000 by signing an eight-month, 4 percent note payable. The entire amount, plus interest, is due March 31, 2021.

Account Debit Credit

Cash 304,150

Accounts Receivable 99,000

Office supplies 880

Prepaid rent. 3,960

Unexpired insurance 1,650

Office equipment 79,200

Accumulated depreciation: office equipment 26,400

Accounts payable 4,400

Notes payable (due 3/1/12) 66,000

Interest payable 660

Income taxes payable 9,900

Dividends payable 3,500

Unearned consulting fees 24,200

Capital stock 220,000

Retained earnings 44,000

Dividends 3,500

Consulting fees earned 550,000

Rent expense 16,170

Insurance expense 2,420

Office supplies expense 4,950

Depreciation expense: office equipment 12,100

Salaries expense 363,000

Utilities expense 5,280

Interest expense 3,300

Income taxes expense 49,500

Totals 949,060 949,8060

Instructions:

1. Prepare the necessary adjusting journal entries on December 31, 2020. Also prepare an adjusted trial balance dated December 31, 2020 (20 points).
2. From the adjusted trial balance prepared in part a, prepare an income statement and statement of retained earnings for the year ended December 31, 2020. Also prepare the company’s balance sheet dated December 31, 2020 (20 points).
3. Prepare the necessary year-end closing entries (15 points).
4. Prepare an after-closing trial balance (15 points).
5. Compute the company’s average monthly insurance expense for January through November 2020 (5 points).

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Workings for adjustments Amount Note Office supplies Opening 88000 Less Office supplies Closing 33000 Office supplies expense 55000 Office ... View the full answer