The following are the trial balance and the other information related to Bruce Indigo, who operates a construction hauling business. INDIGO TRIAL BALANCE DECEMBER 31, 2020 Debit Credit Cash $31,000 Accounts Receivable 49,400 Allowance for Doubtful Accounts $2,900 Supplies 3,080 Prepaid Insurance 1,600 Equipment 26,500 Accumulated Depreciation—Equipment 6,250 Notes Payable 4,800 Owner’s Capital 45,760 Service Revenue 93,050 Rent Expense 10,400 Salaries and Wages Expense 28,800 Utilities Expenses 1,180 Office Expense 800 $152,760 $152,760 1. Fees received in advance from clients $4,400, which were recorded as revenue. 2. Services performed for clients that were not recorded by December 31, $4,300. 3. Equipment is being depreciated at 8% per year. 4. Bad debt expense for the year is $1,260. 5. Insurance expired during the year $480. 6. Indigo gave the bank a 90-day, 5% note for $4,800 on December 1, 2020. 7. Rent of the building is $800 per month. The rent for 2020 has been paid, as has that for January 2021. 8. Office salaries and wages earned but unpaid December 31, 2020, $1,400. Indigo withdrew $10,500 cash for personal use during the year. Prepare a statement of owner’s equity for 2020. (List items that increase owner's equity first.)

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 following are the trial balance and the other information related to Bruce Indigo, who operates a construction hauling business.

INDIGO TRIAL BALANCE DECEMBER 31, 2020
	Debit	Credit
Cash	$31,000
Accounts Receivable	49,400
Allowance for Doubtful Accounts			$2,900
Supplies	3,080
Prepaid Insurance	1,600
Equipment	26,500
Accumulated Depreciation—Equipment			6,250
Notes Payable			4,800
Owner’s Capital			45,760
Service Revenue			93,050
Rent Expense	10,400
Salaries and Wages Expense	28,800
Utilities Expenses	1,180
Office Expense	800
	$152,760		$152,760

1.		Fees received in advance from clients $4,400, which were recorded as revenue.
2.		Services performed for clients that were not recorded by December 31, $4,300.
3.		Equipment is being depreciated at 8% per year.
4.		Bad debt expense for the year is $1,260.
5.		Insurance expired during the year $480.
6.		Indigo gave the bank a 90-day, 5% note for $4,800 on December 1, 2020.
7.		Rent of the building is $800 per month. The rent for 2020 has been paid, as has that for January 2021.
8.		Office salaries and wages earned but unpaid December 31, 2020, $1,400.

Indigo withdrew $10,500 cash for personal use during the year.

Prepare a statement of owner’s equity for 2020. (List items that increase owner's equity first.)

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