Question 3

(50 marks)

Barbara Imagine created Imagine That, a proprietorship, in 2016. Imagine Thats unadjusted T-accounts had the following December 31, 2018 balances:

Cash			Accounts Receivable			Supplies
Bal. 82,000			Bal. 127,000			Bal. 13,000

Office Furniture			Accumulated Amortization, Office Furniture			Accounts Payable
Bal. 166,000				Bal. 31,000			Bal. 43,000

Bank Loan			Unearned Service Revenue			Salary Payable
	Bal. 115,000			Bal. 1,000

Barbara Imagine, Capital			Barbara Imagine, Withdrawals			Service Revenue
	Bal. 118,000		Bal. 157,000				Bal. 375,000

Supplies Expense			Salary Expense			Advertising Expense
			Bal. 103,000			Bal. 25,000

Amortization Expense, Office Furniture			Interest Expense
			Bal. 10,000

Accounts that required adjustments at December 31, 2018 were comprised of the following:

1. Amortization for the year was $ 16,500.
2. Supplies on hand at December 31, 2018 were $ 5,000.
3. Bonuses accrued at year end were $ 43,000 and were going to be paid in March, 2019.
4. Imagine That signed a contract on December 31, 2018. The contract stated that Imagine That was to provide interior design work for a shopping mall that was going to be open in June 2019. Imagine That was given a cheque for $ 250,000.
5. On December 31, 2018, Imagine That received a $ 6,000 invoice regarding an ad that it placed on the internet. The invoice will be paid in February 2019.

Required:

1. Record the above T-account information on a worksheet trial balance column. Then, record the adjusting journal entries onto the worksheet, and complete the worksheet. Identify each adjusting journal entry by the numeral corresponding to the data given.
2. In a journal, record the adjusting and closing journal entries. Provide explanations.
3. Prepare Imagine Thats December 31, 2018 income statement.
4. Prepare Imagine Thats December 31, 2018 statement of owners equity.
5. Prepare Imagine Thats December 31, 2018 balance sheet.
6. Prepare Imagine Thats December 31, 2018 post-closing trial balance.