Beruflich Dokumente
Kultur Dokumente
Next, you begin to prepare the annual financial statements. Before preparing the
statements, you identify the following additional information.
Of the cash payments received from customers on December 1, 30% of these
services were performed in December and half relates to future services to be
rendered in the following year.
Ten months of the insurance policy expired by the end of the year.
Depreciation for the full year should be recorded on the building purchased. The
building has a 30-year life and no residual value. Depreciation will be recorded
on a straight-line basis.
A total of $10,000 of supplies remains on hand at the end of the year.
Interest expense in the amount of $6,000 should be accrued on the note payable.
Wages in the amount of $25,000 must be accrued at year end to be paid in
January.
Using this additional information, you are able to make required adjusting journal
entries, prepare the financial statements and close the books for the year. To
accomplish these tasks, you must perform the following:
d.
e.
f.
g.
You prepare the following chart of accounts for Herman and Sons Law Offices:
Group
100: Assets
Chart of Accounts
Account #
Account Title
101
102
103
104
110
112
Cash
Accounts receivable
Office supplies
Prepaid insurance
Building
Accumulated depreciation - building
201
202
203
210
220
Accounts payable
Unearned service revenue
Wages payable
Interest payable
Notes payable
301
310
320
Capital stock
Retained earnings
Dividends declared
401
Service revenue
501
502
503
504
505
506
510
520
Wage expense
Utilities expense
Selling expense
Administrative expense
Insurance expense
Supplies expense
Depreciation expense
Interest expense
601
Income summary
200: Liabilities
300: Equity
400: Revenues
500: Expenses
600: Other