2. Prepare the adjusted trial balance for the company.3. Prepare the 2019 company's financial statements for presentation to the bank and to help address the first issue concerning Allan.4. Has the owner's equity grown from its original $40,000 balance? Can Mr. Thorpe expect to get the loan? Give your reasons. Salary expenseDepreciation expenseDec 31 Bal17,000Advertising expenseUtilities expenseDec 31 Bal800Supplies expenseRent expenseApply Your KnowledgeAllan indicates that, at year-end, customers owe him $1,000 accrued service revenue, which he expects to collect earlynext year. These revenues have not been recorded. During the year, he collected $4,100 service revenue in advancefrom customers, but the business has earned only $800 of that amount. During the year he has incurred $2,400 ofadvertising expense, but he has not yet paid for it. In addition, he has used up $2,100 of the supplies. Allan determinesthat depreciation on equipment was $7,000 for the year. At December 31, he owes his employee $1,200 accrued salary.The rent paid in advance on Jan 2 for $2,800 relates to the period January 2019 through to February 2020. The ownermade no capital investments during the year.Allan expresses concern that drawing during the year might have exceeded the business's net income. To get a loan toexpand the business, Allan must show the bank that the business's owner's equity has grown from its original $40,000balance. You and Allan agree that you will meet again in one week.Requirement:1. Prepare the journal entries for the transactions that were not previously recorded, prepare and update the T-accounts and determine the ending balance on all accounts used by the company. Scenario:One year ago, Allan Thorpe founded Alcazar Sales Company, and the business has prospered. Allan comes to you foradvice. He wishes to know how much net income the business earned during the past year. The accounting recordsconsist of the T-accounts in the ledger, which were prepared by an accountant who has resigned from the company. Theaccounts at December 31, are as follows:CashAccounts receivableDec 31 Bal5,800Dec 31 Bal12,300Prepaid rentSupplies2,6002-Jan2,8002-JanAccumulated depreciation- equipmentEquipment52,0002-JanAccounts payableSalary payableDec 31 Bal18,500Unearned service revenueAllan Thorpe, capitalDec 31 Bal4,1002-Jan40,000Allan Thorpe, drawingService revenueDec 31 Bal50,000Dec 31 Bal80,700

2) Particulars Debit Credit Cash $5,800 Accounts Receivable $13,300 Prepaid…

2. Prepare the adjusted trial balance for the company. 3. Prepare the 2019 company's financial statements for presentation to the bank and to help address the first issue concerning Allan. 4. Has the owner's equity grown from its original $40,000 balance? Can Mr. Thorpe expect to get the loan? Give your reasons.

2. Prepare the adjusted trial balance for the company. 3. Prepare the 2019 company's financial statements for presentation to the bank and to help address the first issue concerning Allan. 4. Has the owner's equity grown from its original $40,000 balance? Can Mr. Thorpe expect to get the loan? Give your reasons.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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