The accounts of Gleneagles Company prior to the year-end adjustments follow on the next page….

(Learning Objective 3, 4: Computing financial statement amounts) The accounts of Gleneagles Company prior to the year-end adjustments follow on the next page. Adjusting data at the end of the year include:

a. Unearned service revenue that has been earned, $1,000.

b. Accrued service revenue, $2,000.

c. Supplies used in operations, $3,000.

d. Accrued salary expense, $3,000.

e. Perpaid insurance expired, $1,000.

f. Depreciation expense—building, $2,000.

Cash

$ 4,000

Common stock

$ 10,000

Accounts receivable

7,000

Retained earnings

43,000

Supplies

4,000

Dividends

16,000

Prepaid insurance

3,000

Service revenue

155,000

Building

107,000

Salary expense

32,000

Accumulated depreciation building

14,000

Depreciation expense building

Land

51,000

Supplies expense

Accounts payable

6,000

Insurance expense

Salary payable

5,000

Advertising expense

7,000

Unearned service revenue

Utilities expense

2,000

Mack Shaughnessy, the principal stockholder, has received an offer to sell Gleneagles Company. He needs to know the following information within 1 hour:

a. Net income for the year covered by these data

b. Total assets

c. Total liabilities

d. Total stockholders’ equity

e. Proof that total assets = total liabilities + total stockholders’ equity after all items are updated.

Required

Without opening any accounts, making any journal entries, or using a work sheet, provide Mr. Shaughnessy with the requested information. The business is not subject to income tax. Show all computations.

Freddie Handel began a music business in July 20X4. Handel prepares monthly financial statements and uses the accrual basis of accounting. The following transactions are Handel Company’s only activities during January through April:

Jan. 14

Bought music on account for $10, with payment to the supplier due in 90 days.

Feb. 3

Performed a job on account for Joey Bach for $25, collectible from Bach in 30 days. Used up all the music purchased on Jan. 14.

Mar. 16

Collected the $25 receivable from Bach.

Apr. 22

Paid the $10 owed to the supplier from the January 14 transaction.

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