The following information is available to the accountant:

1. A physical count of supplies on December 31 shows that the value of supplies on hand equal to 100×6

2. 1. Annual depreciation for the buildings is $3,000. All the equipment the company owns was purchased on June 1, 2019, and is estimated to have 5 years of useful life with no residual value.

   2. The firm uses the straight-line depreciation method.

3. 3. The insurance policy is a 2-year policy starting May 1, 2019.

4. Forty percent of unearned service revenue is earned in 2019.

5. 5. The notes payable were borrowed on August 31, 2018, with a maturity date on August 31, 2028, and an interest rate of 8%.

6. 

7. Questions: (a) Prepare adjusting entries for Smart Play Service on December 31 2019. You may omit descriptions for the journal entries. (b) Prepare the closing entries for Smart Play Service on December 31 2019. You may omit descriptions for the journal entries.

8. (c) Prepare the income statement for 2019 fiscal year, and a classified statement of financial

   position on December 31 2019.

   (d) For a firm that prepares annual financial statements, describe the formal accounting cycle of the firm. Specifically, 1) in chronological order, list the formal steps involved in the financial reporting process within a complete fiscal year; and 2) identify the document or file

   accountants use or create in each step, if any. Please limit your answer to 250 words.
    

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Smart Play Service has fiscal year end on December 31 and prepares annual financial statements. At the end of the 2019, its trial balance before adjustment on December 31 is as follows. Account Names Cash Accounts Receivable Allowance for Doubtful Accounts Supplies Prepaid Insurance Land Buildings Accumulated Depreciation-Buildings Equipment Unearned Service Revenue Accounts Payable Notes Payable Share Capital- Ordinary Share Capital- Premium Retained Earnings Dividends Service Revenue Smart Play Service Trial Balance December 31, 2019 Advertising Expense Salaries and Wages Expense Utility Expense Debit $17,800 10,000 5,080 3,600 45,000 60,000 15,000 1,000 600 3,300 900 $162,280 Credit $200 1,500 5,000 4,700 40,000 10,000 22,280 65,000 13,600 $162,280 Smart Play Service has fiscal year end on December 31 and prepares annual financial statements. At the end of the 2019, its trial balance before adjustment on December 31 is as follows. Account Names Cash Accounts Receivable Allowance for Doubtful Accounts Supplies Prepaid Insurance Land Buildings Accumulated Depreciation-Buildings Equipment Unearned Service Revenue Accounts Payable Notes Payable Share Capital- Ordinary Share Capital- Premium Retained Earnings Dividends Service Revenue Smart Play Service Trial Balance December 31, 2019 Advertising Expense Salaries and Wages Expense Utility Expense Debit $17,800 10,000 5,080 3,600 45,000 60,000 15,000 1,000 600 3,300 900 $162,280 Credit $200 1,500 5,000 4,700 40,000 10,000 22,280 65,000 13,600 $162,280