4. The following Trial Balance of Euroconsultants S.A. is given to you. You know that the company adjusts its books each month and closes its books at the end of the year. The trial balance at January 31, 2019, before adjustments is as follows: Credit Debat $39,645 27,000 3,375 Cash Accounts Receivable Supplies Prepad Advertising. Equpment Accumulated Depreciation: Equipment Uneamed Consuting Fees Income Taes Payable Capital Stock Retained Earmings Consulting Fees Earmed Salaries Expense Unlities Expense Rent Expense 7,560 64, 800 $22,500 17,550 15,840 18,000 23,850 78,570 28,800 1,080 $126.310 $126.310 Your manager gives you the following information related to the month-end adjustments: a) Consulting fees received in advance, according to signed contracts, and were earned in January were equal to a total of $13,500. b) The company paid in advance for 5 months' advertising, on the 1* of November 2018, (remaining prepaid advertisement amount before adjustments covers 3 remaining months). c) On the 31" of January 2019, supplies on hand (remaining supplies) amount to $2,250. d) The useful life of the company's equipment was originally estimated to be 4 years. e) The corporation is subject to income taxes of 25% of taxable income. (Assume taxable income is the same as "income before taxes" and use the 25% rate to estimate the taxes that the company will have to pay) Questions: A. What is the balance in the Unearned Consulting Fees account on the 31* of January, after the proper adjusting entry is made? B. What are the amounts of the Advertising Expense and the Supplies Expense accounts to be reported in the January Income Statement? C. After the proper adjusting entry is recorded, what is the Book Value of the equipment on the 31# of January? D. Present the Income Statement and compute the amount of Net Income or Loss to be shown in the January Income Statement.
4. The following Trial Balance of Euroconsultants S.A. is given to you. You know that the company adjusts its books each month and closes its books at the end of the year. The trial balance at January 31, 2019, before adjustments is as follows: Credit Debat $39,645 27,000 3,375 Cash Accounts Receivable Supplies Prepad Advertising. Equpment Accumulated Depreciation: Equipment Uneamed Consuting Fees Income Taes Payable Capital Stock Retained Earmings Consulting Fees Earmed Salaries Expense Unlities Expense Rent Expense 7,560 64, 800 $22,500 17,550 15,840 18,000 23,850 78,570 28,800 1,080 $126.310 $126.310 Your manager gives you the following information related to the month-end adjustments: a) Consulting fees received in advance, according to signed contracts, and were earned in January were equal to a total of $13,500. b) The company paid in advance for 5 months' advertising, on the 1* of November 2018, (remaining prepaid advertisement amount before adjustments covers 3 remaining months). c) On the 31" of January 2019, supplies on hand (remaining supplies) amount to $2,250. d) The useful life of the company's equipment was originally estimated to be 4 years. e) The corporation is subject to income taxes of 25% of taxable income. (Assume taxable income is the same as "income before taxes" and use the 25% rate to estimate the taxes that the company will have to pay) Questions: A. What is the balance in the Unearned Consulting Fees account on the 31* of January, after the proper adjusting entry is made? B. What are the amounts of the Advertising Expense and the Supplies Expense accounts to be reported in the January Income Statement? C. After the proper adjusting entry is recorded, what is the Book Value of the equipment on the 31# of January? D. Present the Income Statement and compute the amount of Net Income or Loss to be shown in the January Income Statement.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:4. The following Trial Balance of Euroconsultants S.A. is given to you. You know that the
company adjusts its books each month and closes its books at the end of the year. The
trial balance at January 31, 2019, before adjustments is as follows:
Debit
$39,645
27,000
3,375
7,560
64,800
Credit
Cash
Accounts Receivable.
Supplies.
Prepaid Advertisin g.
Equipment.
Accumulated Depreciation: Equipment
Unearmed Consulting Fees.
Income Taxes Payable
Capital Stock
Retained Earmings
Consulting Fees Eamed.
Salaries Expense.
Utilities Expense
Rent Expense
$22,500
17,550
15,840
18,000
23,850
78,570
28, 800
1,080
4,050
$126.310
$176.310
Your manager gives you the following information related to the month-end
adjustments:
a) Consulting fees received in advance, according to signed contracts, and were earned
in January were equal to a total of $13,500.
b) The company paid in advance for 5 months' advertising, on the 1* of November
2018, (remaining prepaid advertisement amount before adjustments covers 3
remaining months).
c) On the 31* of January 2019, supplies on hand (remaining supplies) amount to
$2,250.
d) The useful life of the company's equipment was originally estimated to be 4 years.
e) The corporation is subject to income taxes of 25% of taxable income. (Assume
taxable income is the same as "income before taxes" and use the 25% rate to estimate
the taxes that the company will have to pay)
Questions:
A. What is the balance in the Unearned Consulting Fees account on the 31 of January,
after the proper adjusting entry is made?
B. What are the amounts of the Advertising Expense and the Supplies Expense accounts
to be reported in the January Income Statement?
C. After the proper adjusting entry is recorded, what is the Book Value of the
equipment on the 31* of January?
D. Present the Income Statement and compute the amount of Net Income or Loss to
be shown in the January Income Statement.
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