Financial Statements

Learning Goal: I’m working on an accounting case study and need the explanation and answer to help me learn.

  • On January 1, 2018, a payment in cash for $12,000 is made for prepaying rent for the entire year 2018.
  • On January 4, 2018, accounting services are performed and payment is received in cash for the amount of $1,900.
  • On January 9, 2018, a payment in cash for advertising is made in the amount of $850.
  • On January 10, 2018, office supplies are purchased in the amount of $75 with cash.
  • On January 14, 2018, accounting services are performed and payment is received in cash for the amount of $2,725.
  • On January 20, 2018, the telephone bill for the amount of $660 is received and paid with cash.
  • On January 20, 2018, the utility bill for $2,925 is received. The bill won’t be paid until it’s due on February 15, 2018.
  • On January 27, 2018, accounting services are performed on account in the amount of $3,750.
  • On January 28, 2018, a payment in cash for $1,500 is made for a bill from an advertising agency.(
    6. Journalize the following adjusting journal entries in the general journal, being sure that the debits equal the credits:

    1. Calculate and make the adjustment for the amount of prepaid rent that has been used.
    2. Make an adjusting journal entry in the amount of $1,000 for depreciation of the vehicles.
    3. Make an adjusting journal entry in the amount of $100 for depreciation of the equipment.

    7. Post the adjusted journal entries to the

  • My beginning balance of $21,500 was my Retained earnings balance on the statement for December 31st 2017

J & L Accounting Inc.

Post-Closing Trial Balance January 31, 2018

Account Title Debit Credit
Cash   $           10,460.00
Accounts Receivable $             3,750.00  
Prepaid Rent $           11,000.00  
Office Supplies $                   75.00  
Accumulated Depreciation , Vehicles   $            1,000.00
Accumulated Depreciation , Equipment   $                100.00
Accounts Payable   $            2,925.00
Service Revenue   $            8,375.00
Rent Expense $            1,000.00  
Advertising Expense $            2,350.00  
Telephone Expense $                660.00  
Utilities Expense $            2,925.00  
Depreciation – Vehicle $            1,000.00  
Depreciation – Equipment $                100.00  
Totals $          22,860.00 $          22,860.00

PLACE ORDER 

J & L Accounting, Inc. Balance Sheet

As of January 31, 2018

 

Assets Debit Credit
Cash   $           10,460.00
Accounts Receivable   $              3,750.00
Prepaid Rent   $           11,000.00
Office Supplies   $                   75.00

 

Total Assets   $           25,285.00

 

Liabilities Debit Credit
Accounts Payable $          2,925.00  

 

Stockholders’ Equity Debit Credit
Accumulated

Depreciation , Vehicles

  $              1,000.00
Accumulated

Depreciation , Equipment

  $                 100.00

 

Total Stockholders’ Equity   $              1,100.00

 

Total Liabilities &

Stockholders’ Equity

$          2,925.00 $              1,100.00

Income Statement

For the Month Ending January 31, 2018

Revenues Debit Credit
Service Revenue   $           8,375.00
Total Revenues   $           8,375.00

 

Expenses Debit Credit
Rent Expense $          1,000.00  
Advertising Expense $          2,350.00  
Telephone Expense $              660.00  
Utilities Expense $          2,925.00  
Depreciation – Vehicle $          1,000.00  
Depreciation – Equipment $              100.00  

 

Total Expenses $         8,035.00  

 

Net Income   $                 340.00