Question 1Part ICucu Pets Company (CP) is a pet beauty shop that provides grooming services for pets. Oldcustomers usually have an account with CP and they are billed after receiving services for their pets.New customers have to pay in advance, and the amounts are credited to unearned fees account. CPperformed adjusting entries at the end of each month, and closing entries are performed annuallyon 31 December. Below is CP's unadjusted trial balance as at 31 December 20x3.Account TitleCashAccounts receivablePrepaid rentSupplies5% Note receivable (due in Apr.20x4)Accounts payableIncome tax payableUnearned feesCucu Pets CompanyUnadjusted Trial BalanceAs at 31 December 20x3Share capital (15,000 Ordinary Share at $10 each)Retained earningsFees earnedInterest revenueSupplies expenseSalaries expenseRent expenseUtilities expenseIncome tax expenseTOTALDebit $299,80025,000240,0001,000180,00012,000190,000200,0008,00033,0001,188,800Credit S36,05033,00060,000150,000Required:99,000810,0007501,188,800Information for entries/adjusting entries:(1) Purchased $450 supplies of animal's shampoos on account on 30 December 20x3 but not yetrecorded.(3) A $60,000 machine was bought by cash on 1 October 20x3. It has 10 years' useful life and CPuses straight-line depreciation. Both the purchase and all related adjusting entries were notrecorded.(4) On 1 December 20x3, CP prepaid and recorded a one-year rental of $240,000 covering up to 30November 20x4.(5) $11,000 of unearned fees in the book was now earned on 31 December 20x3.(6) On 31 December 20x3, an old customer made a booking for pet grooming service on 5 January20x4. Payment will be made when service is provided.(7) The Board of Directors declared a dividend of $0.1 per share and will be paid out next year.(8) The 5% note receivable was money lent to CC Company on 1 August 20x3 for 9 months. Interestis received at the end of each month. Journal entries were made up to 31 August 20x3.(9) From 16 November to 15 December 20x3, CP has to provide one month grooming services forthe Pet Show at a monthly fee of $30,000. Adjusting entries were recorded at the end ofNovember. CP received $30,000 cash on 15 December 20x3 but no record was made.(10) Estimated income tax expense for the entire year 20x3 was $52,000 that is due for payment in20x4.(a) Prepare the necessary entries/adjusting entries on 31 December 20x3. No explanation isrequired. Show all workings in your journal. Use the account titles given in the TrialBalance or create new accounts where appropriate. If it does not require adjustment, state"no entry" and give the name of the accounting principle(s) applied. No need to explain.(b) Prepare the Income Statement for the year ended 31 December 20x3, under the captions ofRevenues, Expenses, Profit before taxes and Profit after taxes.(c) Prepare the Statement of Financial Position as at 31 December 20x3, under the captions ofTotal Assets, Total Liabilities, Total Equity, Total Liabilities and Equity.(d) Prepare year-end closing entries.Cornical normally adjusts its books monthly. (1) to (5) below are entries made/information noted inDecember 2023. They are independent from each other. Other than those recorded as stated, noother adjusting entries were made in 20x3. (1) On 1 December 20x3, Cornical bought a machine at $7,600 by cash with useful life of 4 years.Cornical recorded: Dr Machine $7,600 and Cr Cash $7,600.(2) Cornical agreed to provide two months' services to Musko Co. from 1 December 20x3 to 31January 20x4 for a total fee of $3,000. Musko paid the $3,000 on 1 December 20x3, Cornicalrecorded: Dr Cash $3,000 and Cr Unearned Fees $3,000.(3) On 1 December 20x3, Cornical recorded a $90,000 one-year note payable signed with ABCBank with 10% interest rate per annum. The interest is paid by each month end. Cornicalrecorded: Dr Cash $90,000 and Cr Note Payable $90,000(4) On 31 December 20x3, the Board of Directors declared and paid out a dividend of $5,000. Noentries were ade by Cornical.(5) Cornical prepaid a 6 months' insurance of $2,400 effective from 1 December 20x3. Cornicalrecorded: Dr Prepaid Insurance $2,400 and Cr Cash $2,400.Required:Assume no other adjusting entries were made. Indicate the effects on Cornical's book as at 31December 20x3. Copy the Table for Answer below and fill in the answers. DO NOT copy theexample. State O = overstated, U = understated and NE = no effectExample:There is an accrued and unrecorded $500 fees earned in December 2023. No entries were madeby Cornical. The effects on the book are:e.g.RevenueUTable for Answer(1)(2)(3)(4)(5)RevenueExpensesNEExpensesProfitUProfitAssetsUAssetsLiabilitiesNELiabilitiesEquityUEquity

Revenue Fees earned (810000+11000+15000) 836,000…

Prepare the Income Statement for the year ended 31 December 20x3, under the captions of Revenues, Expenses, Profit before taxes and Profit after taxes. Prepare the Statement of Financial Position as at 31 December 20x3, under the captions of Total Assets, Total Liabilities, Total Equity, Total Liabilities and Equity.

Prepare the Income Statement for the year ended 31 December 20x3, under the captions of Revenues, Expenses, Profit before taxes and Profit after taxes. Prepare the Statement of Financial Position as at 31 December 20x3, under the captions of Total Assets, Total Liabilities, Total Equity, Total Liabilities and Equity.

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter9: Receivables

Section: Chapter Questions

Problem 2PB: Wig Creations Company supplies wigs and hair care products to beauty salons throughout Texas and the...

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