Question 3 Patella Art Studio provides quality instruction to aspiring artists. The business adjusts its accounts monthly, but performs closing entries annually on December 31. This is the studio's unadjusted trial balance dated December 31, 2002. Cash PATELLA ART STUDIO Unadjusted Trial Balance December 31, 2002 $22,380 Client Fees Receivable Supplies Prepaid Studio Rent Studio Equipment Accounts Payable Interest Payable Note Payable Unearned Client Fees Pat Patella, Capital 71,250 6,000 2,500 96,000 Accumulated Depreciation: Studio Equipment $52,000 11,420 480 24,000 8,000 70,000 5,000 82,310 4,000 17,250 480 11,250 3,300 8,800 $248,210 $248,210 Pat Patella, Withdrawals Client Fees Earned Supplies Expense Salary Expense Interest Expense Studio Rent Expense Utilities Expense Depreciation Expense: Studio Equipment Other Data: i) ii) iii) iv) v) vi) Total Supplies on hand at December 31, 2002, total $1,000. The studio pays rent quarterly (every three months) in advance. The last payment was made November 1, 2002. The next payment will be made in February 2003. Studio equipment is being depreciated over 120 months (10 years). On October 1, 2002, the Patella borrowed $24,000 by signing a 12-month, 12% note payable. The entire amount, plus interest, is due on September 30, 2003. At December 31, 2002, $3,000 of previously unearned client fees had been earned. Accrued, but unrecorded and uncollected client fees earned total $690 at December 31, 2002 vii) Accrued, but unrecorded and unpaid salary expense totals $750 at December 31, 2002. -5- Required: a) Prepare the necessary adjusting journal entries on December 13, 2002. Prepare the accountant's worksheet dated December 31, 2002 (See page 10) b) From the adjusted trial balance, prepare an income statement and statement of owner's equity for the year ended December 31, 2002. Also prepare the entity's classified balance sheet dated December 31, 2002. c) Prepare the necessary year-end closing entries. d) Prepare a post-closing trial balance.
Question 3 Patella Art Studio provides quality instruction to aspiring artists. The business adjusts its accounts monthly, but performs closing entries annually on December 31. This is the studio's unadjusted trial balance dated December 31, 2002. Cash PATELLA ART STUDIO Unadjusted Trial Balance December 31, 2002 $22,380 Client Fees Receivable Supplies Prepaid Studio Rent Studio Equipment Accounts Payable Interest Payable Note Payable Unearned Client Fees Pat Patella, Capital 71,250 6,000 2,500 96,000 Accumulated Depreciation: Studio Equipment $52,000 11,420 480 24,000 8,000 70,000 5,000 82,310 4,000 17,250 480 11,250 3,300 8,800 $248,210 $248,210 Pat Patella, Withdrawals Client Fees Earned Supplies Expense Salary Expense Interest Expense Studio Rent Expense Utilities Expense Depreciation Expense: Studio Equipment Other Data: i) ii) iii) iv) v) vi) Total Supplies on hand at December 31, 2002, total $1,000. The studio pays rent quarterly (every three months) in advance. The last payment was made November 1, 2002. The next payment will be made in February 2003. Studio equipment is being depreciated over 120 months (10 years). On October 1, 2002, the Patella borrowed $24,000 by signing a 12-month, 12% note payable. The entire amount, plus interest, is due on September 30, 2003. At December 31, 2002, $3,000 of previously unearned client fees had been earned. Accrued, but unrecorded and uncollected client fees earned total $690 at December 31, 2002 vii) Accrued, but unrecorded and unpaid salary expense totals $750 at December 31, 2002. -5- Required: a) Prepare the necessary adjusting journal entries on December 13, 2002. Prepare the accountant's worksheet dated December 31, 2002 (See page 10) b) From the adjusted trial balance, prepare an income statement and statement of owner's equity for the year ended December 31, 2002. Also prepare the entity's classified balance sheet dated December 31, 2002. c) Prepare the necessary year-end closing entries. d) Prepare a post-closing trial balance.
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Transcribed Image Text:Question 3
Patella Art Studio provides quality instruction to aspiring artists. The business adjusts its
accounts monthly, but performs closing entries annually on December 31. This is the studio's
unadjusted trial balance dated December 31, 2002.
Cash
PATELLA ART STUDIO
Unadjusted Trial Balance
December 31, 2002
$22,380
Client Fees Receivable
Supplies
Prepaid Studio Rent
Studio Equipment
Accounts Payable
Interest Payable
Note Payable
Unearned Client Fees
Pat Patella, Capital
71,250
6,000
2,500
96,000
Accumulated Depreciation: Studio Equipment
$52,000
11,420
480
24,000
8,000
70,000
5,000
82,310
4,000
17,250
480
11,250
3,300
8,800
$248,210
$248,210
Pat Patella, Withdrawals
Client Fees Earned
Supplies Expense
Salary Expense
Interest Expense
Studio Rent Expense
Utilities Expense
Depreciation Expense: Studio Equipment
Other Data:
i)
ii)
iii)
iv)
v)
vi)
Total
Supplies on hand at December 31, 2002, total $1,000.
The studio pays rent quarterly (every three months) in advance. The last payment was
made November 1, 2002. The next payment will be made in February 2003.
Studio equipment is being depreciated over 120 months (10 years).
On October 1, 2002, the Patella borrowed $24,000 by signing a 12-month, 12% note
payable. The entire amount, plus interest, is due on September 30, 2003.
At December 31, 2002, $3,000 of previously unearned client fees had been earned.
Accrued, but unrecorded and uncollected client fees earned total $690 at December 31,
2002
vii) Accrued, but unrecorded and unpaid salary expense totals $750 at December 31, 2002.
-5-
Required:
a) Prepare the necessary adjusting journal entries on December 13, 2002. Prepare the accountant's
worksheet dated December 31, 2002 (See page 10)
b) From the adjusted trial balance, prepare an income statement and statement of owner's equity for
the year ended December 31, 2002. Also prepare the entity's classified balance sheet dated
December 31, 2002.
c) Prepare the necessary year-end closing entries.
d) Prepare a post-closing trial balance.
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