roke Art Studio, Inc., provides quality instruction to aspiring artists. The business its accounts monthly, but performs closing entries annually on December 31. the studio's unadjusted trial balance dated December 31, current year. Other Data 1. Supplies on hand at December 31, current year, total $1,00 2. The studio pays rent quarterly (every three months). The la November 1, current year. The next payment will be made BRUSHSTROKE ART STUDIO, INC. UNADJUSTED TRIAL BALANCE year. DECEMBER 31, CURRENT YEAR 3. Studio equipment is being depreciated over 120 months (1 4. On October 1, current year, the studio borrowed $24,000 b 12 percent note payable. The entire amount, plus interest, next year. 5. At December 31, current year, S3,000 of previously unear Debits |Credits $22,380 receivable 71,250 6,000 dio rent 2,500 earned. 6. Accrued, but unrecorded and uncollected client fees earneC pment 96,000 ulated depreciation: studio equipment $52,000 ayable 6,420 31, current year. le 7. Accrued, but unrecorded and unpaid salary expense totals 24,000 able 480 current year.
roke Art Studio, Inc., provides quality instruction to aspiring artists. The business its accounts monthly, but performs closing entries annually on December 31. the studio's unadjusted trial balance dated December 31, current year. Other Data 1. Supplies on hand at December 31, current year, total $1,00 2. The studio pays rent quarterly (every three months). The la November 1, current year. The next payment will be made BRUSHSTROKE ART STUDIO, INC. UNADJUSTED TRIAL BALANCE year. DECEMBER 31, CURRENT YEAR 3. Studio equipment is being depreciated over 120 months (1 4. On October 1, current year, the studio borrowed $24,000 b 12 percent note payable. The entire amount, plus interest, next year. 5. At December 31, current year, S3,000 of previously unear Debits |Credits $22,380 receivable 71,250 6,000 dio rent 2,500 earned. 6. Accrued, but unrecorded and uncollected client fees earneC pment 96,000 ulated depreciation: studio equipment $52,000 ayable 6,420 31, current year. le 7. Accrued, but unrecorded and unpaid salary expense totals 24,000 able 480 current year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Depreciation expense: studio equipment
Income taxes expense
8,800
Adjusting and Closing Entries
5,000
Totals
$248,210| $248,210
Brushstroke Art Studio, Inc., 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, current year.
Other Data
1. Supplies on hand at December 31, current year, total $1,000.
2. The studio pays rent quarterly (every three months). The last payment was made
November 1, current year. The next payment will be made early in February, next
BRUSHSTROKE ART STUDIO, INC.
UNADJUSTED TRIAL BALANCE
year.
DECEMBER 31, CURRENT YEAR
3. Studio equipment is being depreciated over 120 months (10 years).
4. On October 1, current year, the studio borrowed $24,000 by signing a 12-month,
12 percent note payable. The entire amount, plus interest, is due on September 30,
next year.
Debits |Credits
Cash
$22,380
Client fees receivable
71,250
Supplies
6,000
5. At December 31, current year, $3,000 of previously unearned client fees had been
earned.
Prepaid studio rent
2,500
Studio equipment
96,000
6. Accrued, but unrecorded and uncollected client fees earned total $690 at December
31, current year.
Accumulated depreciation: studio equipment $52,000
Accounts payable
6,420
7. Accrued, but unrecorded and unpaid salary expense totals $750 at December 31,
current year.
Note payable
24,000
Interest payable
480
8. Accrued income taxes expense for the entire year ending December 31, current
year, total $7,000. The full amount is due early in the next year.
Unearned client fees
8,000
Income taxes payable
5,000
Capital stock
50,000
Instructions
Retained earnings
20,000
1. Prepare the necessary adjusting journal entries on December 31, current year. Pre-
pare also an adjusted trial balance dated December 31, current year.
2. From the adjusted trial balance prepared in part a, prepare an income statement and
statement of retained earnings for the year ended December 31, current year. Also
prepare the company’s balance sheet dated December 31, current year.
Client fees earned
82,310
Supplies expense
4,000
Salary expense
17,250
Interest expense
480
Studio rent expense
11,250
Utilities expense
3,300
Fim do documento I
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