Prolme 3-4B Interpreting unadjusted and adjusted trial balances, and preparing financial statements P1 P2 P3 P4 P5 P6
A six-column table for JKL Company follows. The first two columns contain the unadjusted
Unadjusted Trial Balance Adjustments Unadjusted Trial Balance Cash $45.000 $ 45,000Accounts receivable 60,000 66.660 Office supplies 40.000 17.000 Prepaid insurance 8,200 3.600 Office equipment 120,000 120,000Accumulated depreciation — Office equip $ 20.000 $ 30.000 Accounts payable 26.000 32,000 Interest payable 0 2,150 Salaries payable 0 16,000 Unearned consulting fees 40.000 27,800 Long-term notes payable 75.000 75,000 Z.Yan, Capital 80.200 80,200 Z. Van. Withdrawals 20,000 20.000 Consulting fees earned 234.600 253,460 Depredation expense— Office equip 0 10,000 Salaries expense 112.000 128.000 Interest expense 8.600 10.750 Insurance expense 0 4,600 Rent expense 20.000 20,000 Office supplies expense 0 23.000 Advertising expense 42,000 48.000 Totals $475,800 $475,800 $516,610 $516,610 Page 122
Required
Analysis Component
1. Analyze the differences between the unadjusted and adjusted trial balances to determine the eight adjustments that likely were made. Show the results of your analysis by inserting these adjustment amounts in the table's two middle columns. Label each adjustment with a letter a through h and provide a short description of each.
Preparation Component
2. Use the information in the adjusted trial balance to prepare the company's (a) income statement and its statement of owner's equity for the year ended July 31 [Note: J. Logan, Capital at July 31 of the peior year was $40,000, and the current-year withdrawals were $20,000] and (b) the
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Chapter 3 Solutions
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