Problem 4-9 (page 2)

Required 1. Identify and analyze each of the preceding transactions. 2. Prepare a list of accounts and their balances for Moonlight Bay at January 31, 2010- Reect the recurring transactions for the month of January but not the necessary monthend adjustments. 3. Identify and analyze the necessary adjustments for each of the following: Depreciation of the house Depreciation of the irniture Interest on the promissory note Recognition of the expired portion of the insurance Recognition of the earned portion of the guest's deposit Wages earned during the second half of January amount to $5,120 and will be paid on February 3. Cleaning supplies on hand on January 31 amount to $230. A gas and electric bill that is received from the city amounts to $740 and is payable by February 5. i. Income taxes are to be accrued at a rate of 30% of income before taxes. 4. Prepare in good form the following nancial statements: a. Income statement for the month ended January 31, 2010 b. Statement of retained earnings for the month ended January 31, 2010 c. Balance sheet at January 31, 2010 5. Assume that you are the loan ofcer at Second State Bank. (Refer to the transaction on January 3.) What are your reactions to Moonlight's rst month of operations? Are you comfortable with the loan you made? Explain your answer. moan LT?" p