Using the information provided in E4- 12:
In E4- 12
MPS, Inc. has the following unadjusted account balances as of December 31, 2015, the company’s year- end:
• Cash: $ 430,000
• Accounts Receivable: $ 2,000
• Prepaid Insurance: $ 14,000
• Prepaid Rent: $ 22,000
• Equipment: $ 60,000
• Accumulated Depreciation— Equipment: $ 0
• Accounts Payable: $ 10,000
• Common Stock: $ 16,000
• Sales Revenue: $ 823,100
• Wage Expense: $ 290,400
• Utilities Expense: $ 11,200
* Exercises and problems that can be solved using Excel are indicated with the symbol, . .
• Insurance Expense: $ 8,500
• Rent Expense: $ 11,000
• Depreciation Expense— Equipment: $ 0 At year- end, MPS makes adjusting journal entries to properly record revenues and expenses. The following information applies to the adjusting journal entries:
• The prepaid insurance balance relates to an insurance policy purchased on January 1, 2015, that covers the period of 1 / 1 / 15 – 12 / 31/ 15. 1 / 1 / 15 – 12 / 31 / 15.
• The prepaid rent balance relates to rent paid in June 2015 to cover the period of 7/ 1/ 15– 6/ 30/ 16.7 / 1 / 15 – 6 / 30 / 16.
• Wages for 2015 in the amount of $ 26,000 will be paid after year- end and have not yet been recorded.
• MPS purchased the equipment in the beginning of January 2015 and will depreciate it on a yearly basis. No depreciation has been recorded yet. The equipment has a useful life of 15 years, no residual value, and will be depreciated on a straight line basis.
Required
a. Prepare an unadjusted trial balance for MPS, Inc. as of December 31, 2015.
b. Prepare an adjusted trial balance for MPS, Inc. as of December 31, 2015.