The following is a list of accounts and their balances for Casa Bella Interiors at May 31
Question:
Casa Bella Interiors
Accounts and balances
May 31, 2010
Cash ................ $ 4,300
Accounts receivable .......... 9,300
Notes receivable ............ 1,000
Interest receivable .......... —
Prepaid rent ............. 1,700
Supplies ................ 400
Office equipment ........... 23,400
Accumulated depreciation ....... (1,600)
(office equipment)
Accounts payable ........... 500
Salaries payable ........... —
Interest payable ........... —
Unearned service revenue ....... 2,600
Long-term notes payable ....... 8,400
Common stock ........... 5,000
Additional paid-in capital ....... 2,300
Retained earnings .......... 5,000
Service revenue ...........19,800
Salary expense ............ 4,650
Rent expense
Depreciation expense
Advertising expense ......... 450
Additional data follow:
• Depreciation on the office equipment for the year is $500.
• Salaries owed to employees at year end but not yet recorded or paid total $750.
• Prepaid rent that has expired at year-end amounts to $800.
• Interest due at year end on the notes receivable is $120.
• Interest owed at year end on the notes payable is $840.
• Unearned service revenue that has actually been earned by year end totals $1,500.
Requirements
1. For each account, show the adjustment needed at year end.
2. Prepare an income statement for the year ended May 31, 2010, and a balance sheet at May 31, 2010.
3. Calculate the firm’s profit margin on sales ratio for the year.
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Related Book For
Financial Accounting: A Business Process Approach
ISBN: 978-0136115274
3rd edition
Authors: Jane L. Reimers
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