Prepare an income statement and owner’s equity statement for the 6 months ended June 30 and a…
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Sommer Graphics Company was organized on January 1, 2014, by Krystal Sommer. At the end of the first 6 months of operations, the trial balance contained the accounts shown below.
Debit
Credit
Cash
$ 8,600
Notes Payable
$ 20,000
Accounts Receivable
14,000
Accounts Payable
9,000
Equipment
45,000
Owner's Capital
22,000
Insurance Expense
2,700
Sales Revenue
52,100
Salaries and Wages Expense
30,000
Service Revenue
6,000
Supplies Expense
3,700
Advertising Expense
1,900
Rent Expense
1,500
Utilities Expense
1,700
$109,100
$109,100
Analysis reveals the following additional data.
1. The $3,700 balance in Supplies Expense represents supplies purchased in January. At June 30, $1,500 of supplies are on hand.
2. The note payable was issued on February 1. It is a 9%, 6-month note.
3. The balance in Insurance Expense is the premium on a one-year policy, dated March 1, 2014.
4. Service revenues are credited to revenue when received. At June 30, services revenue of $1,300 are unearned.
5. Revenue for services performed but unrecorded at June 30 totals $2,000.
6. Depreciation is $2,250 per year.
Instructions
(a) Journalize the adjusting entries at June 30. (Assume adjustments are recorded every 6 months.)
(b) Prepare an adjusted trial balance.
(c) Prepare an income statement and owner's equity statement for the 6 months ended June 30 and a balance sheet at June 30.