Very Good Building Co. is an architectural services company and uses the accrual basis of accounting. After recording all transactions for the month of December, but before making any adjustments, the unadjusted balances are as follows:

	ASSETS =				LIABILITIES +			STOCKHOLDERS EQUITY
	Money	prepaid insurance	supplies	Machinery	Accounts payable	unearned income	Pay	Common actions	Retained earnings
Unadjusted balance, December 31	5,000	2,800	800	3,000	1,000	1,800	2,500	800	5,500

The effect of the transactions on the income statement (before any adjustments) is as follows:

12/2: Income	$9,000
12/16: Salary expense	($3,000)

Good Building Co must make adjustments on December 31, 2022 due to the following information:

a) A physical inventory of supplies reveals that there are $300 of supplies on hand.

b) The depreciation of the machine amounted to $50 per month.

c) Architectural services performed but not billed as of December 31, 2022 amounted to $6,500

d) Employees will be paid on January 13, 2023. Accrued wages as of December 31, 2022 are $3,000

e) $400 of expired prepaid insurance

f) $1,200 of unearned income was earned

Required

1. After making all adjustments, calculate net income for the month ending December 31, 2022.

2. After all adjustments are made, calculate the net book value of the machinery.

3. After all adjustments have been made, calculate the amount of total assets that will be reported on the Balance Sheet dated December 31, 2022?

4. After all adjustments have been made, calculate the total liability amount that will be reported on the Balance Sheet dated December 31, 2022?

5. After making all the adjustments, calculate the retained earnings reported on the balance sheet as of December 31, 2022?

Answer rating: 100% (QA)

To calculate the required values we need to make the necessary adjustments based on the given information Lets go through each adjustment a Supplies A... View the full answer