Using the information provided in P4- 3, perform the following steps: 

In P4-3

Required 

a. Journalize and post adjusting journal entries for Herman and Sons’ based on the following additional information:

• Of the cash payments received from customers on December 1, half of these services were performed in December and half relates to future services to be rendered in the following year. 

• Ten months of the insurance policy expired by the end of the year. 

• Depreciation for the full year should be recorded on the building purchased. The building has a 20 year life and no residual value. Depreciation will be recorded on a straight- line basis. 

• A total of $ 15,000 of supplies remains on hand at the end of the year.

• Interest expense in the amount of $ 7,000 should be accrued on the note payable. 

• Wages in the amount of $ 32,000 must be accrued at year end to be paid in January. 

b. Prepare an adjusted trial balance as of December 31. 

c. Prepare a single- step income statement, a statement of shareholders’ equity, and a balance sheet.

Transcribed Image Text:

Chart of Accounts Group Account # Account Title 100: Assets 101 102 103 104 110 112 Cash Accounts Recaivable Office Supplies Prepaid Insurance Building Accumulated Depreciation-Building Chart of Accounts Group Account # Account Title 200: Liabilities 201 202 203 210 220 Accounts Payable Uneaned Service Revenue Wages Payable Interest Payable Notes Payable 300: Stockholders' Equity 301 310 320 Common Stock Retained Earnings Dividends 400: Revenues 401 Service Revenue 500: Expenses 501 502 503 504 505 506 510 520 Wage Expense Utilities Expense Selling Expense Administrative Expense Insurance Expense Supplies Expense Depreciation Expense -Building Interest Expense 600: Other 601 Income Summary