The unadjusted trial balance for Brown Inc. follows. Unadjusted Trial Balance December 31 Account Cash Accounts receivable Prepaid lease…

The unadjusted trial balance for Brown Inc. follows. Unadjusted Trial Balance December 31 Account Cash Accounts receivable Prepaid lease…

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The unadjusted trial balance for Brown Inc. follows. Unadjusted Trial Balance December 31 Account Cash Accounts receivable Prepaid lease…
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The unadjusted trial balance for Brown Inc. follows.
Unadjusted Trial Balance
December 31
Account
Cash
Accounts receivable
Prepaid lease expense
Supplies
Equipment
Accumulated depreciation-Equipment
Accounts payable
Note payable
Common stock
Retained earnings
Dividends
Service revenue
Interest expense
Salaries expense
Utility expense
Miscellaneous expense
Totals
Debit
$12,640 $
12,000
38,400
22,000
40,000
20,000
Credit
6,000
4,000
16,000
40,000
16,000
100,000
960
26,000
4,000
6,000
$182,000 $182,000
Additional information for accounting adjustments 1. Brown was required to pay the entire rental for a one-year lease beginning July 1 for $26,400 cash. Brown recorded the payment as a debit to Prepaid Lease Expense. Hint: At year-end, there
are no other short-term leases to account for besides the lease described here.
2. A year-end count revealed $4,000 of supplies still available.
3. Annual depreciation expense on the equipment is $2,000.
4. Unpaid and unrecorded salaries is $4,000 at year-end.
5. The note payable calls for annual interest of 8%, payable each September 30. The principal amount of the note is not due for several years. a. Record the required adjusting journal entries. b. Prepare the adjusted trial balance. c. Prepare the income statement for the year and the balance sheet at year-end. d. Prepare the closing entries, using the Income Summary account to close out revenues and expenses. The unadjusted trial balance for Brown Inc. follows.
Unadjusted Trial Balance
December 31
Account
Cash
Accounts receivable
Prepaid lease expense
Supplies
Equipment
Accumulated depreciation-Equipment
Accounts payable
Note payable
Common stock
Retained earnings
Dividends
Service revenue
Interest expense
Salaries expense
Utility expense
Miscellaneous expense
Totals
Debit
$12,640 $
12,000
38,400
22,000
40,000
20,000
Credit
6,000
4,000
16,000
40,000
16,000
100,000
960
26,000
4,000
6,000
$182,000 $182,000
Additional information for accounting adjustments 1. Brown was required to pay the entire rental for a one-year lease beginning July 1 for $26,400 cash. Brown recorded the payment as a debit to Prepaid Lease Expense. Hint: At year-end, there
are no other short-term leases to account for besides the lease described here.
2. A year-end count revealed $4,000 of supplies still available.
3. Annual depreciation expense on the equipment is $2,000.
4. Unpaid and unrecorded salaries is $4,000 at year-end.
5. The note payable calls for annual interest of 8%, payable each September 30. The principal amount of the note is not due for several years. a. Record the required adjusting journal entries. b. Prepare the adjusted trial balance. c. Prepare the income statement for the year and the balance sheet at year-end. d. Prepare the closing entries, using the Income Summary account to close out revenues and expenses. The unadjusted trial balance for Brown Inc. follows.
Unadjusted Trial Balance
December 31
Account
Cash
Accounts receivable
Prepaid lease expense
Supplies
Equipment
Accumulated depreciation-Equipment
Accounts payable
Note payable
Common stock
Retained earnings
Dividends
Service revenue
Interest expense
Salaries expense
Utility expense
Miscellaneous expense
Totals
Debit
$12,640 $
12,000
38,400
22,000
40,000
20,000
Credit
6,000
4,000
16,000
40,000
16,000
100,000
960
26,000
4,000
6,000
$182,000 $182,000
Additional information for accounting adjustments 1. Brown was required to pay the entire rental for a one-year lease beginning July 1 for $26,400 cash. Brown recorded the payment as a debit to Prepaid Lease Expense. Hint: At year-end, there
are no other short-term leases to account for besides the lease described here.
2. A year-end count revealed $4,000 of supplies still available.
3. Annual depreciation expense on the equipment is $2,000.
4. Unpaid and unrecorded salaries is $4,000 at year-end.
5. The note payable calls for annual interest of 8%, payable each September 30. The principal amount of the note is not due for several years. a. Record the required adjusting journal entries. b. Prepare the adjusted trial balance. c. Prepare the income statement for the year and the balance sheet at year-end. d. Prepare the closing entries, using the Income Summary account to close out revenues and expenses. The unadjusted trial balance for Brown Inc. follows.
Unadjusted Trial Balance
December 31
Account
Cash
Accounts receivable
Prepaid lease expense
Supplies
Equipment
Accumulated depreciation-Equipment
Accounts payable
Note payable
Common stock
Retained earnings
Dividends
Service revenue
Interest expense
Salaries expense
Utility expense
Miscellaneous expense
Totals
Debit
$12,640 $
12,000
38,400
22,000
40,000
20,000
Credit
6,000
4,000
16,000
40,000
16,000
100,000
960
26,000
4,000
6,000
$182,000 $182,000
Additional information for accounting adjustments 1. Brown was required to pay the entire rental for a one-year lease beginning July 1 for $26,400 cash. Brown recorded the payment as a debit to Prepaid Lease Expense. Hint: At year-end, there
are no other short-term leases to account for besides the lease described here.
2. A year-end count revealed $4,000 of supplies still available.
3. Annual depreciation expense on the equipment is $2,000.
4. Unpaid and unrecorded salaries is $4,000 at year-end.
5. The note payable calls for annual interest of 8%, payable each September 30. The principal amount of the note is not due for several years. a. Record the required adjusting journal entries. b. Prepare the adjusted trial balance. c. Prepare the income statement for the year and the balance sheet at year-end. d. Prepare the closing entries, using the Income Summary account to close out revenues and expenses. The unadjusted trial balance for Brown Inc. follows.
Unadjusted Trial Balance
December 31
Account
Cash
Accounts receivable
Prepaid lease expense
Supplies
Equipment
Accumulated depreciation-Equipment
Accounts payable
Note payable
Common stock
Retained earnings
Dividends
Service revenue
Interest expense
Salaries expense
Utility expense
Miscellaneous expense
Totals
Debit
$12,640 $
12,000
38,400
22,000
40,000
20,000
Credit
6,000
4,000
16,000
40,000
16,000
100,000
960
26,000
4,000
6,000
$182,000 $182,000
Additional information for accounting adjustments 1. Brown was required to pay the entire rental for a one-year lease beginning July 1 for $26,400 cash. Brown recorded the payment as a debit to Prepaid Lease Expense. Hint: At year-end, there
are no other short-term leases to account for besides the lease described here.
2. A year-end count revealed $4,000 of supplies still available.
3. Annual depreciation expense on the equipment is $2,000.
4. Unpaid and unrecorded salaries is $4,000 at year-end.
5. The note payable calls for annual interest of 8%, payable each September 30. The principal amount of the note is not due for several years. a. Record the required adjusting journal entries. b. Prepare the adjusted trial balance. c. Prepare the income statement for the year and the balance sheet at year-end. d. Prepare the closing entries, using the Income Summary account to close out revenues and expenses. The unadjusted trial balance for Brown Inc. follows.
Unadjusted Trial Balance
December 31
Account
Cash
Accounts receivable
Prepaid lease expense
Supplies
Equipment
Accumulated depreciation-Equipment
Accounts payable
Note payable
Common stock
Retained earnings
Dividends
Service revenue
Interest expense
Salaries expense
Utility expense
Miscellaneous expense
Totals
Debit
$12,640 $
12,000
38,400
22,000
40,000
20,000
Credit
6,000
4,000
16,000
40,000
16,000
100,000
960
26,000
4,000
6,000
$182,000 $182,000
Additional information for accounting adjustments 1. Brown was required to pay the entire rental for a one-year lease beginning July 1 for $26,400 cash. Brown recorded the payment as a debit to Prepaid Lease Expense. Hint: At year-end, there
are no other short-term leases to account for besides the lease described here.
2. A year-end count revealed $4,000 of supplies still available.
3. Annual depreciation expense on the equipment is $2,000.
4. Unpaid and unrecorded salaries is $4,000 at year-end.
5. The note payable calls for annual interest of 8%, payable each September 30. The principal amount of the note is not due for several years. a. Record the required adjusting journal entries. b. Prepare the adjusted trial balance. c. Prepare the income statement for the year and the balance sheet at year-end. d. Prepare the closing entries, using the Income Summary account to close out revenues and expenses. The unadjusted trial balance for Brown Inc. follows.
Unadjusted Trial Balance
December 31
Account
Cash
Accounts receivable
Prepaid lease expense
Supplies
Equipment
Accumulated depreciation-Equipment
Accounts payable
Note payable
Common stock
Retained earnings
Dividends
Service revenue
Interest expense
Salaries expense
Utility expense
Miscellaneous expense
Totals
Debit
$12,640 $
12,000
38,400
22,000
40,000
20,000
Credit
6,000
4,000
16,000
40,000
16,000
100,000
960
26,000
4,000
6,000
$182,000 $182,000
Additional information for accounting adjustments 1. Brown was required to pay the entire rental for a one-year lease beginning July 1 for $26,400 cash. Brown recorded the payment as a debit to Prepaid Lease Expense. Hint: At year-end, there
are no other short-term leases to account for besides the lease described here.
2. A year-end count revealed $4,000 of supplies still available.
3. Annual depreciation expense on the equipment is $2,000.
4. Unpaid and unrecorded salaries is $4,000 at year-end.
5. The note payable calls for annual interest of 8%, payable each September 30. The principal amount of the note is not due for several years. a. Record the required adjusting journal entries. b. Prepare the adjusted trial balance. c. Prepare the income statement for the year and the balance sheet at year-end. d. Prepare the closing entries, using the Income Summary account to close out revenues and expenses.

Expert Answer:

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a To record the required adjusting journal entries we need to account for the additional information provided 1 Adjust prepaid lease expense for the p
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