It is December 31, 2017, Ashley\'s Coffee Co. just finished Before preparing the

Question

It is December 31, 2017, Ashley's Coffee Co. just finished Before preparing the financial statements (as of 12/31/2017 and for period ending 12/31/2017), they are needns assistance in preparing the necessary 'adjustments" to ensure te fnanal statements are following concepts. Using the information provided below (A-G). Record the adusting Tabular Analysis. Make sure you label all accounts used in each adjusting entry all of the regular transactions that occurred during 2017 accrual accounting s of 12/31/2017 using the A. On July 1, 2017, the Company prepaid their rent to Annie's Real Estate. The prepayment totaled $35,000 and covered the company's rent for five years (July 1, 2017-June 30, 2022) B. On January 1, 2017, the Company received an advance payment of $225,000 from the Caroline's Crafts Store for services that will be provided over a three year period, January 1, 2017-December 31, 2019 (36 months)- C. The Company pays employee salaries once a month (e.g January 1) for all salaries earned during the previous month During December 2017, the Company's employees have earmed $5,000 worth of salaries, which will be paid on January 1 2018. D. On December 31, 2017, the Company was fined by the SEC for paying a bribe to city ofials buring 2017. The fine totaled E. On Jlanuary 1, 2017, the Company took out a $500,000 loan, which required a $40,000 interest payment on January 1 F On January 1,2017, the Company prepaid $50,00 tor isurance that would cover the period January 1,2017-December G. On December 31, 2017, the Company provided $26,000 of services to Halle G's Green Tea on account/credit. The $70,000 and will be paid by the company on March 1, 2018. 2018. 31, 2021 (5 years or 60 months). Company would receive payment from Halle G during February 2018 CHART OF ACCOUNTS YOU MAY NOT USE ALL ACCOUNTS LISTED Cost of Goods Eamings Sales Revenue Insurance Expense Salary Payable Interest Payable Interest Expense Accounts Payable Salary Expenses Fine Expense Cash Common Stock Sold Prepaid Rent Accounts ReceivableA Retained Unearned Revenue Fine Payable Rent Expense Unearned Revenue Revenue Inventory Prepaid Insurance Cash Flow Expense Dividend ExenseEquipment Buildin ADJUSTMENT-A BALANCE SHEE LIABILITY INCOME STATEMENT ASSET EQUITY REVENUE EXPENSE Accounts Amounts

Explanation / Answer

Note: All reductions to account balances have been shown with a minus sign.

Working:

A: Rent expense = $35000 x 6/60 = $3500

B: Service revenue earned = $225000 x 12/36 = $75000

F: Insurance expense = $50000 x 1/5 = $10000

ADJUSTMENT - A BALANCE SHEET INCOME STATEMENT ASSET LIABILTY EQUITY REVENUE EXPENSE Accounts Prepaid rent Rent expense Amounts $                          -3,500 $                         3,500 ADJUSTMENT - B BALANCE SHEET INCOME STATEMENT ASSET LIABILTY EQUITY REVENUE EXPENSE Accounts Unearned revenue Service revenue Amounts $                     -75,000 $                 75,000 ADJUSTMENT - C BALANCE SHEET INCOME STATEMENT ASSET LIABILTY EQUITY REVENUE EXPENSE Accounts Salary payable Salary expenses Amounts $                         5,000 $                         5,000 ADJUSTMENT - D BALANCE SHEET INCOME STATEMENT ASSET LIABILTY EQUITY REVENUE EXPENSE Accounts Fine payable Fine expense Amounts $                      70,000 $                      70,000 ADJUSTMENT - E BALANCE SHEET INCOME STATEMENT ASSET LIABILTY EQUITY REVENUE EXPENSE Accounts Interest payable Interest expense Amounts $                      40,000 $                      40,000 ADJUSTMENT - F BALANCE SHEET INCOME STATEMENT ASSET LIABILTY EQUITY REVENUE EXPENSE Accounts Prepaid insurance Insurance expense Amounts $                       -10,000 $                      10,000 ADJUSTMENT - G BALANCE SHEET INCOME STATEMENT ASSET LIABILTY EQUITY REVENUE EXPENSE Accounts Accounts receivable Service revenue Amounts $                         26,000 $                 26,000

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