Question 1 - Financial Statements
The amount of the assets and liabilities of Nordic Travel Agency at December 31, 2016, the end of the year, and its revenue and expenses for the year follow. The capital of Ian Eisele, Owner, Was $67 0000 on January 1, , the beginning of the year. During the Year, Ian withdrew $42 000.
Accounts payable $69500 Rent expenses $36000
Accounts receivable $285000 Supplies $5500
Cash $190500 Supplies Expense $4100
Fees earned $912500 Utilities expense $28500
Land $544000 Wages expense $51000
Misc Expenses $6400
Instructions -
1. Prepare an income statement for the year ended December 31, 2016.
2. Prepare a statement of owner's equity for the year ended 31, 2016
3. Prepare a balance sheet as of December 31, 2016
4. What item appears on both the statement of owner's equity and the balance sheet?
Question 2 - Adjusting entries and adjusted trial balances
Rowland Company is a small editorial services company owned and operated by Marlene Rowland. On August 31, 2016, the end of the current year, Rowland Company's accounting clerk prepared the following unadjusted trial balance:
ACCOUNT TITLE DEBIT CREDIT
1 Cash 7,500.00
2 Accounts Receivable 38,400.00
3 Prepaid Insurance 7,200.00
4 Supplies 1,980.00
5 Land 112,500.00
6 Building 150,250.00
7 Accumulated Depreciation-Building 87,550.00
8 Equipment 135,300.00
9 Accumulated Depreciation-Equipment 97,950.00
10 Accounts Payable 12,150.00
11 Unearned Rent 6,750.00
12 Marlene Rowland, Capital 221,000.00
13 Marlene Rowland, Drawing 15,000.00
14 Fees Earned 324,600.00
15 Salaries and Wages Expense 193,370.00
16 Utilities Expense 42,375.00
17 Advertising Expense 22,800.00
18 Repairs Expense 17,250.00
19 Miscellaneous Expense 6,075.00
20 Totals 750,000.00 750,000.00
The data needed to determine year-end adjustments are as follows:
a. Unexpired insurance at August 31, $6,000.
b. Supplies on hand at August 31, $480.
c. Depreciation of building for the year, $7,500.
d. Depreciation of equipment for the year, $4,150.
e. Rent unearned at August 31, $1,550.
f. Accrued salaries and wages at August 31, $3,200.
g. Fees earned but unbilled on August 31, $11,330.
Required:
1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation Expense-Building; Depreciation Expense-Equipment; and Supplies Expense. Refer to the Chart of Accounts for exact wording of account titles.
2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance.