4. Prepare an 5. Prepare the income statement, balance sheet, statement of cash flows, and statement of stockholder's equity for the year 2020. alizo and nost the closing entries.

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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I have done the trail balance. I need help on required # 5.
Trial Balance
Credit
Account title
Debit
Cash
69.000
16,000
Accounts receivable
3,000
Allowance for doubtful accounts
Job supplies
15,000
40,000
Trucks
Equipment
Accumulated Depreciation
30,000
30000
34,000
15,000
30,000
Land
Accounts payable
Wages payable
Interest payable
2,000
Income taxes payable
4,000
Long-term notes payable
30,000
Common stock ($0.25 par value)
75,000
20,000
Additional paid-in capital
Retained earnings
மனயம்
20,000
Dividends
Z10,000
Service revenue
15,000
26,000
5,000
Wages expense
Supplies expense
Bad debt expense
Depreciation expense
7,000
3,000
4,000
110000
435,000
Interest expense
Income tax expense
Misc. expenses
Totals
Transcribed Image Text:Trial Balance Credit Account title Debit Cash 69.000 16,000 Accounts receivable 3,000 Allowance for doubtful accounts Job supplies 15,000 40,000 Trucks Equipment Accumulated Depreciation 30,000 30000 34,000 15,000 30,000 Land Accounts payable Wages payable Interest payable 2,000 Income taxes payable 4,000 Long-term notes payable 30,000 Common stock ($0.25 par value) 75,000 20,000 Additional paid-in capital Retained earnings மனயம் 20,000 Dividends Z10,000 Service revenue 15,000 26,000 5,000 Wages expense Supplies expense Bad debt expense Depreciation expense 7,000 3,000 4,000 110000 435,000 Interest expense Income tax expense Misc. expenses Totals
$15,000 cash was paid for land. V
C.
d.
Purchased another truck with $23,000 cash. A
Purchased $27,000 supplies on account. V
On 3/1/2020, $30,000 cash was borrowed on a two-year 8% note payable. V
Incurred $110,000 in miscellaneous expenses for 2020, $20,000 on credit and the rest paid in
e.
f.
g.
cash.
h. Collected $34,000 owned on account.
i.
Paid $26,000 towards accounts payable.
Signed a $2,000 one-year service contract for work to begin on 2/1/2021.
k. Declared and paid $20,000 in cash dividends.
j.
Adjusting entries:
Interest accrued on the notes payable in step f. V
b. $3,000 of bad debt was written off during the year. V
а.
$15,000 in wages earned but will not be paid until 1/3/2021. A
$15,000 in supplies remained on 12/31/2020. n
e. $7,000 depreciation on equipment for 2020.
$8,000 in income taxes for 2020 will be paid in 2021.
g. $3,000 of the A/R is estimated to be uncollectable.
C.
d.
f.
Required:
1. Set up T-accounts for the trial balance accounts and enter beginning balances.
2. Prepare journal entries for the 2020 transactions and post them to the ledger.
3. Prepare and post the adjusting entries. VM
4. Prepare an adjusted trial balance A
5. Prepare the income statement, balance sheet, statement of cash flows, and statement of
stockholder's equity for the year 2020.
6. Journalize and post the closing entries.
7. Compute the following ratios for 2020 and briefly explain what they suggest about the company
(round to 2 decimals).
a. Current ratio
b. Net profit margin
C. Total asset turnover
Check numbers: Adjusted trial balance total debits = $435,000, Total liabilities and equity should equal
$209,000.
000.01
Transcribed Image Text:$15,000 cash was paid for land. V C. d. Purchased another truck with $23,000 cash. A Purchased $27,000 supplies on account. V On 3/1/2020, $30,000 cash was borrowed on a two-year 8% note payable. V Incurred $110,000 in miscellaneous expenses for 2020, $20,000 on credit and the rest paid in e. f. g. cash. h. Collected $34,000 owned on account. i. Paid $26,000 towards accounts payable. Signed a $2,000 one-year service contract for work to begin on 2/1/2021. k. Declared and paid $20,000 in cash dividends. j. Adjusting entries: Interest accrued on the notes payable in step f. V b. $3,000 of bad debt was written off during the year. V а. $15,000 in wages earned but will not be paid until 1/3/2021. A $15,000 in supplies remained on 12/31/2020. n e. $7,000 depreciation on equipment for 2020. $8,000 in income taxes for 2020 will be paid in 2021. g. $3,000 of the A/R is estimated to be uncollectable. C. d. f. Required: 1. Set up T-accounts for the trial balance accounts and enter beginning balances. 2. Prepare journal entries for the 2020 transactions and post them to the ledger. 3. Prepare and post the adjusting entries. VM 4. Prepare an adjusted trial balance A 5. Prepare the income statement, balance sheet, statement of cash flows, and statement of stockholder's equity for the year 2020. 6. Journalize and post the closing entries. 7. Compute the following ratios for 2020 and briefly explain what they suggest about the company (round to 2 decimals). a. Current ratio b. Net profit margin C. Total asset turnover Check numbers: Adjusted trial balance total debits = $435,000, Total liabilities and equity should equal $209,000. 000.01
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