The Smart brain is a company that is located in Rawalpindi, Pakistan. The Client Still more operates a private investigating agency called Still more Investigations. Some clients pay in advance for services; others are billed after services have been performed. Advance payments are credited to an account entitled Unearned Retainer Fees. Adjusting entries are performed on a monthly basis. An unadjusted trial balance dated December 31, 2019, follows. (Bear in mind that adjusting entries have already been made for the first 11 months of 2019, but not for December.) Other Data Accrued but unrecorded client fees earned at December 31 amount toRS 1,500. Records show that RS 2,500 of cash receipts originally recorded as Unearned Retainer Fees had been earned as of December31. Office supplies on hand at December 31 amount toRS 110. The company purchased all of its office equipment when it first began business. At that time, the equipment’s estimated useful life was six years (or 72months). On October 1, 2019, the company renewed its rental agreement paying RS 1,800 cash for six months’ rent inadvance. OnMarch1ofthecurrentyear,thecompanypaidRS 1,080cashtorenewits12-monthinsurance policy. Accrued but unrecorded salaries at December 31 amount toRS 1,900. On June 1, 2019, the company borrowed money from the bank by signing a RS 9,000, 8 percent, 12-monthnotepayable.Theentirenote,plus12months’accruedinterest,isdueonMay31,2020. The company’s CPA estimates that income taxes expense for the entire year isRS 7,500. STILLMORE SMART BRAIN UNADJUSTED TRIAL BALANCE DECEMBER 31, 2019 Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RS 40,585 Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000 Office supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 Prepaid rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200 Unexpired insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270 Office equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,000 Accumulated depreciation: office equipment . . . . . . . . . . . . . . . . . . . RS 35,250 Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,400 Interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360 Income taxes payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,750 Note payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000 Unearned retainer fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,500 Capital stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000 Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 Client fees earned. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000 Office supplies expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 605 Depreciation expense: office equipment. . . . . . . . . . . . . . . . . . . . . . . 8,250 Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,775 Insurance expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,010 Salaries expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,100 Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360 Income taxes expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,900 Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RS 149,260 RS 149,260 Required: For each of the above numbered paragraphs, prepare the necessary adjusting entry (including anexplanation). Prepare the company’s adjusted trial balance dated December 31,2019. Using figures from the adjusted trial balance prepared in b, compute net income for the year ended December 31,2019.

The Smart brain is a company that is located in Rawalpindi, Pakistan. The Client Still more operates a private investigating agency called Still more Investigations. Some clients pay in advance for services; others are billed after services have been performed. Advance payments are credited to an account entitled Unearned Retainer Fees. Adjusting entries are performed on a monthly basis. An unadjusted trial balance dated December 31, 2019, follows. (Bear in mind that adjusting entries have already been made for the first 11 months of 2019, but not for December.) Other Data Accrued but unrecorded client fees earned at December 31 amount toRS 1,500. Records show that RS 2,500 of cash receipts originally recorded as Unearned Retainer Fees had been earned as of December31. Office supplies on hand at December 31 amount toRS 110. The company purchased all of its office equipment when it first began business. At that time, the equipment’s estimated useful life was six years (or 72months). On October 1, 2019, the company renewed its rental agreement paying RS 1,800 cash for six months’ rent inadvance. OnMarch1ofthecurrentyear,thecompanypaidRS 1,080cashtorenewits12-monthinsurance policy. Accrued but unrecorded salaries at December 31 amount toRS 1,900. On June 1, 2019, the company borrowed money from the bank by signing a RS 9,000, 8 percent, 12-monthnotepayable.Theentirenote,plus12months’accruedinterest,isdueonMay31,2020. The company’s CPA estimates that income taxes expense for the entire year isRS 7,500. STILLMORE SMART BRAIN UNADJUSTED TRIAL BALANCE DECEMBER 31, 2019 Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RS 40,585 Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000 Office supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 Prepaid rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200 Unexpired insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270 Office equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,000 Accumulated depreciation: office equipment . . . . . . . . . . . . . . . . . . . RS 35,250 Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,400 Interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360 Income taxes payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,750 Note payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000 Unearned retainer fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,500 Capital stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000 Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 Client fees earned. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000 Office supplies expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 605 Depreciation expense: office equipment. . . . . . . . . . . . . . . . . . . . . . . 8,250 Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,775 Insurance expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,010 Salaries expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,100 Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360 Income taxes expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,900 Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RS 149,260 RS 149,260 Required: For each of the above numbered paragraphs, prepare the necessary adjusting entry (including anexplanation). Prepare the company’s adjusted trial balance dated December 31,2019. Using figures from the adjusted trial balance prepared in b, compute net income for the year ended December 31,2019.

Name: The Smart brain is a company that is located in Rawalpindi, Pakistan.
Uploaded: 2024-03-04T10:43:15.000Z
Channel: Bartleby
Description: The Smart brain is a company that is located in Rawalpindi, Pakistan. The Client Still more operates a private investigating agency called Still more Investigations. Some clients pay in advance for services; others are billed after services have been

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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Other Data

Accrued but unrecorded client fees earned at December 31 amount toRS 1,500.
Records show that RS 2,500 of cash receipts originally recorded as Unearned Retainer Fees had been earned as of December31.
Office supplies on hand at December 31 amount toRS 110.
The company purchased all of its office equipment when it first began business. At that time, the equipment’s estimated useful life was six years (or 72months).
On October 1, 2019, the company renewed its rental agreement paying RS 1,800 cash for six months’ rent inadvance.
OnMarch1ofthecurrentyear,thecompanypaidRS 1,080cashtorenewits12-monthinsurance policy.
Accrued but unrecorded salaries at December 31 amount toRS 1,900.
On June 1, 2019, the company borrowed money from the bank by signing a RS 9,000, 8 percent, 12-monthnotepayable.Theentirenote,plus12months’accruedinterest,isdueonMay31,2020.
The company’s CPA estimates that income taxes expense for the entire year isRS 7,500.

STILLMORE SMART BRAIN UNADJUSTED TRIAL BALANCE DECEMBER 31, 2019
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	RS 40,585
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,000
Office supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	205
Prepaid rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,200
Unexpired insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	270
Office equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	54,000
Accumulated depreciation: office equipment . . . . . . . . . . . . . . . . . . .		RS 35,250
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,400
Interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		360
Income taxes payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,750
Note payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		9,000
Unearned retainer fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		3,500
Capital stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		30,000
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		8,000
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,000
Client fees earned. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		60,000
Office supplies expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	605
Depreciation expense: office equipment. . . . . . . . . . . . . . . . . . . . . . .	8,250
Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,775
Insurance expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,010
Salaries expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27,100
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	360
Income taxes expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6,900
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	RS 149,260	RS 149,260

Required:

For each of the above numbered paragraphs, prepare the necessary adjusting entry (including anexplanation).
Prepare the company’s adjusted trial balance dated December 31,2019.
Using figures from the adjusted trial balance prepared in b, compute net income for the year ended December 31,2019.

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