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Please help with question B. I will rate. Must show how to get every number.
The following are the trial balance and the other information related to Yorkis Perez, a consulting engineer. 1. Fees received in advance from clients $6, 000, which were recorded as revenue. 2. Services performed for clients that were not recorded by December 31, $4, 900. 3. Bad debt expense for the year is $1, 430. 4. Insurance expired during the year $480. 5. Equipment is being depreciated at 10% per year. 6. Yorkis Perez gave the bank a 90-day 10% note for $7, 200 on December 1, 2017. 7. Rent of the building is $750 per month. The rent for 2017 has been paid, as has that for January 2018, and recorded as Rent Expense. 8. Office salaries and wages earned but unpaid December 31, 2017, $2, 510. Instructions (a) From the trial balance and other information given, prepare annual adjusting entries as of December 31, 2017. (Omit explanations.) (b) Prepare an income statement for 2017, a statement of owner’s equity, and a classified balance sheet. Yorkis Perez withdrew $17, 000 cash for personal use during the year.
Expert Answer
Solution:
Part B)
Income Statement
| Income Statement for 2017 | ||
| $$ | $$ | |
| Service Revenue (100,000 + 4,900 – 6,000) | $98,900 | |
| Expenses: | ||
| Rent Expenses (9,750 – 750 Prepaid Rent for Jan 17 ) | $9,000 | |
| Salaries and Wages Expenses (30,500 + 2,510) | $33,010 | |
| Utilities Expenses | $1,080 | |
| Office Expenses | $720 | |
| Interest Expenses | $60 | |
| Depreciation Expenses | $2,500 | |
| Insurance Expenses | $480 | |
| Bad Debt Expenses | $1,430 | |
| Total Expenses | $48,280 | |
| Net Profit | $50,620 | |
Balance Sheet
| Balance Sheet As at December 31, 2017 | ||
| Assets: | ||
| Current Assets | ||
| Cash (29,500 – 17000) | $12,500 | |
| Accounts receivables (49,600 + 4900) | $54,500 | |
| Less: Allowance for Doubtful Accounts (1,430 + 750) | -$2,180 | |
| Net Accounts Receivables | $52,320 | |
| Supplies | $1,960 | |
| Prepaid Rent (for Jan 2017) | $750 | |
| Prepaid Insurance (1100 -480) | $620 | |
| Total Current Assets | $68,150 | |
| Fixed Assets | ||
| Equipment | $25,000 | |
| Less: Accumulated Depreciation (6250 + 2500) | -$8,750 | |
| Net Value of Equipment | $16,250 | |
| Total Assets | $84,400 | |
| Liabilities and Stockholder’s Equity | ||
| Current Liabilities | ||
| Notes Payable | $7,200 | |
| Interest Payable | $60 | |
| Salaries and Wages Payable | $2,510 | |
| Unearned Service Revenue | $6,000 | |
| Total Current Liabilities | $15,770 | |
| Owner’s Capital (35,010 + Net Profit for 2017 $50,620 – drawing for personal use $17,000) | $68,630 | |
| Total Liabilities and stockholders’ equity | $84,400 | |
| Statement of Owners’ Equity | |
| $$ | |
| Owner’s Equity (unadjusted) | $35,010 |
| Add: Net Profit for year 2017 | $50,620 |
| Less: Withdrawal for personal use | -$17,000 |
| Ending Owner’s Equity (Adjusted) | $68,630 |
