Answered: commission service Assume at the end of…

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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The company occupies rented office space but owns office equipment estimated to have a useful life of 10 years from date of acquisition, October 1. The trial balance for Key Insurance Agency at December 31 is shown below: Cash Br 20,065 Accounts Receivables 5,050 Supplies 2,000 Prepaid rent 2,500 Inventories 3,000 Office Equipment 6,440 Accounts Payable 2,260 Unearned rent 2,000 Income Taxes Payable 2,965 Capital Stock 20,000 Retained Earnings 7,450 Dividends 2,500 Commissions Earned 31,080 Advertising Expense 2,400 Salaries Expense 18,000 Rent Expense 3,800 Totals Br 65,755 Br 65,755 Additional information for adjustment: Supplies on at the end of December is only br500 40% of unearned revenue earned at the end of December 1/3 of prepaid rent is expired at the end of December Assume at the end of December there is deferred revenue of birr 1,000 from commission service Assume at the end of the month there is accrued salary expense of birr 900 Instructions: Prepare the adjusting entry based on the above unadjusted train balance and additional information’s for the month ended December 2020. Prepare an adjusted trial balance at December 31, 2020. Prepare an income statement and a statement of retained earnings for the month ended December 31, 2017, and a balance sheet in report form at December 31, 2020. Prepare journal entries to close the temporary accounts. Use four entries (1) to close the revenue account, (2) to close the expense accounts, (3) to close the income summary account, and (4) to close the dividend account. Calculate all possible ration analysis (at list two from each ration type) and give appropriate interpret you result

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