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Answer:
Brian Consulting Engineer
1. Adjusting Entries:
a. Debit Service Revenue $5,980
Credit Unearned Fees $5,980
To record unearned fees.
b. Debit Accounts Receivable $4,558
Credit Service Revenue $4,558
To record services performed for clients.
c. Debit Bad Debt Expense $1,328
Credit Allowance for Uncollectibles $1,328
To record bad debt expense for the year.
d. Debit Insurance Expense $519
Credit Prepaid Insurance $519
To record expired insurance expense.
e. Debit Depreciation Expense- Equipment $2,690
Credit Accumulated Depreciation- Equipment $2,690
To record depreciation expense for the year.
f. Debit Interest Expense $60
Credit Interest Payable $60
To record interest expense for a month.
g. Debit Prepaid Rent $815
Credit Rent Expense $815
To record prepaid rent for January 2018.
h. Debit Salaries & Wages Expense $2,616
Credit Salaries & Wages Payable $2,616
To record accrued salaries and wages.
i. Debit Drawings $16,090
Credit Cash $16,090
To record drawing for personal use.
2. Income Statement for the year ended December 31, 2017:
Service Revenue $115,808
Depreciation Expense-
Equipment 2,690
Rent Expense 9,780
Bad Debt Expense 1,328
Salaries and
Wages Expense 37,316
Utilities Expense 1,720
Office Expense 620
Interest Expense 60
Insurance Expense 519
Suspense 3,879 $57,912
Net Income $57,896
3. Classified Balance Sheet as of the year ended December 31, 2017:
Assets
Current Assets:
Cash $13,410
Accounts Receivable 60,758
Allowance for
Doubtful Accounts 2,082 58,676
Supplies 2,370
Prepaid Insurance 1,191
Prepaid Rent 815 $76,462
Long-term Assets:
Equipment 26,900
Accumulated Depreciation 8,922 $17,978
Total assets $94,440
Liabilities + Equity
Liabilities:
Notes Payable 7,200
Salaries & Wages Payable 2,616
Interest Payable 60
Unearned Fees 5,980 $15,856
Owner’s Capital 36,778
Drawings (16,090)
Net Income 57,896 $78,584
Total Liabilities + Equity $94,440
4. Statement of Owner's Equity as of the year ended December 31, 2017:
Owner’s Capital $36,778
Drawings (16,090)
Net Income 57,896
Owner's Capital, ending $78,584
Explanation:
a) Data and Calculations:
BRIAN CONSULTING ENGINEER
TRIAL BALANCE
DECEMBER 31, 2020
Debit Credit
Cash $29,500
Accounts Receivable 56,200
Allowance for Doubtful Accounts $754
Supplies 2,370
Prepaid Insurance 1,710
Equipment 26,900
Accumulated Depreciation-Equipment 6,232
Notes Payable 7,200
Owner’s Capital 36,778
Service Revenue 117,230
Rent Expense
(13 months of rent) 10,595
Salaries and
Wages Expense 34,700
Utilities Expense 1,720
Office Expense 620
Totals $????
Adjusted Trial Balance
Debit Credit
Cash $13,410
Accounts Receivable 60,758
Allowance for Doubtful Accounts $2,082
Supplies 2,370
Prepaid Insurance 1,191
Prepaid Rent 815
Equipment 26,900
Accumulated Depreciation-Equipment 8,922
Notes Payable 7,200
Salaries & Wages Payable 2,616
Interest Payable 60
Owner’s Capital 36,778
Drawings 16,090
Service Revenue 115,808
Unearned Fees 5,980
Depreciation Expense-
Equipment 2,690
Rent Expense 9,780
Bad Debt Expense 1,328
Salaries and
Wages Expense 37,316
Utilities Expense 1,720
Office Expense 620
Interest Expense 60
Insurance Expense 519
Suspense 3,879
Totals $179,446 $179,446
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