{"id":33300,"date":"2022-02-16T00:41:12","date_gmt":"2022-02-16T00:41:12","guid":{"rendered":"https:\/\/assignmenttutors.net\/blog\/tunstall-inc-a-small-service-company-keeps-its-records-without\/"},"modified":"2022-02-16T00:41:12","modified_gmt":"2022-02-16T00:41:12","slug":"tunstall-inc-a-small-service-company-keeps-its-records-without","status":"publish","type":"post","link":"https:\/\/assignmenttutors.net\/blog\/tunstall-inc-a-small-service-company-keeps-its-records-without\/","title":{"rendered":"Tunstall, inc., a small service company, keeps its records without"},"content":{"rendered":"
\n

P4-7 Recording Adjusting and Closing Entries and Preparing a Balance Sheet and Income Statement<\/span><\/p>\n

Including Earnings per Share LO4-1, 4-2, 4-4<\/span><\/p>\n

Tunstall, Inc., a small service company, keeps its records without the help of an accountant. After much effort, an outside accountant prepared the following unadjusted trial balance as of the end of the annual accounting period, December 31, 2014:<\/span><\/p>\n

Account Titles \u00a0Debit Credit<\/span><\/p>\n

\u00a0\u00a0Cash \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0$42,000<\/span><\/p>\n

\u00a0\u00a0Accounts receivable\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a011,600<\/span><\/p>\n

\u00a0\u00a0\u00a0Supplies\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0900<\/span><\/p>\n

\u00a0\u00a0Prepaid insurance\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0800<\/span><\/p>\n

\u00a0\u00a0\u00a0Service trucks\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a019,000<\/span><\/p>\n

\u00a0\u00a0Accumulated depreciation\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0$9,200<\/span><\/p>\n

\u00a0\u00a0Other assets\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a08,300<\/span><\/p>\n

\u00a0\u00a0Accounts payable\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a03,000<\/span><\/p>\n

\u00a0\u00a0Wages payable<\/span><\/p>\n

\u00a0\u00a0Income taxes payable<\/span><\/p>\n

\u00a0\u00a0Note payable (3 years; 10% interest due each December 31)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a017,000<\/span><\/p>\n

\u00a0\u00a0Common stock (5,000 shares outstanding)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0400<\/span><\/p>\n

\u00a0\u00a0Additional paid-in capital\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a019,000<\/span><\/p>\n

\u00a0\u00a0Retained earnings\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a06,000<\/span><\/p>\n

\u00a0\u00a0Service revenue\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a061,360<\/span><\/p>\n

\u00a0\u00a0Remaining expenses (not detailed; excludes income tax)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a033,360<\/span><\/p>\n

\u00a0\u00a0\u00a0Income tax expense<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Totals\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0$115,960\u00a0\u00a0\u00a0\u00a0\u00a0$115,960<\/span><\/p>\n

\u00a0<\/p>\n

Data not yet recorded at December 31, 2014, included:<\/span><\/p>\n

\u00a0<\/p>\n

a. The supplies count on December 31, 2014, reflected $300 remaining supplies on hand to be used in 2015.<\/span><\/p>\n

b. Insurance expired during 2014, $800.<\/span>
<\/span>c. Depreciation expense for 2014, $3,700.<\/span>
<\/span>d. Wages earned by employees not yet paid on December 31, 2014, $640.<\/span>
<\/span>e. Income tax expense, $5,540.<\/span><\/p>\n

Required:<\/span><\/p>\n

1 Record the 2014 adjusting entries.<\/span>\u00a0<\/span>(If no entry is required for a transaction\/event, select “No journal entry required” in the first account field.)<\/span><\/p>\n

\u00a0<\/p>\n

Required:<\/span><\/p>\n

2-a. Prepare an income statement that includes the effects of the preceding five transactions.<\/span>\u00a0<\/span>(Round “Earnings per share” to 2 decimal places.)<\/span><\/p>\n

\u00a0<\/span>Required:<\/span><\/p>\n

2-b. Prepare a classified balance sheet that includes the effects of the preceding five transactions.<\/span>\u00a0<\/span>(Amounts to be deducted should be indicated by a minus sign.)<\/span><\/p>\n

Required:<\/span><\/p>\n

3 Record the 2014 closing entry.<\/span>\u00a0<\/span>(If no entry is required for a transaction\/event, select “No journal entry required” in the first account field.)<\/span><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

P4-7 Recording Adjusting and Closing Entries and Preparing a Balance Sheet and Income Statement Including Earnings per Share LO4-1, 4-2, 4-4 Tunstall, Inc., a small service company, keeps its records without the help of an accountant. After much effort, an outside accountant prepared the following unadjusted trial balance as of the end of the annual […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[],"class_list":["post-33300","post","type-post","status-publish","format-standard","hentry","category-education"],"_links":{"self":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/33300","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/comments?post=33300"}],"version-history":[{"count":0,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/33300\/revisions"}],"wp:attachment":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/media?parent=33300"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/categories?post=33300"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/tags?post=33300"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}