Unadjusted Trial Balance 12/31/16 Total of Debits & Credits Adjustments Adjusted

Question

Unadjusted Trial Balance 12/31/16 Total of Debits & Credits Adjustments Adjusted Trial Balance Account Names Credit(use total as a check) S 1,053,696$ 382,323$ 689,323 689,323 Accounts Receivable Allowance for Bad Debts 3,600 37,000 39,500 300 3,600 3,600 7,200 300 7,200 840 Accumulated Furniture Accumulated 3,000 3,000 6,000 6,000 ation-Furniture 700 271,485 4,500 271,485 4,500 271,485 4,500 (1,500) Short Term Investment- T Tradin 1,500 1,500 Accounts Pa Unearned Revenue Salaries Payable 3,600 1,800 685 8,500 900 ,460 900 303,970 500,000 303,970 500,000 note payable (500,000 48,932 (18,532 Bonds Payable Discount on Bonds Payable Inerest Payable Daniels, Retained Ea Common Stock Paid in Preferred Stock Paid in Sales Revenue Service Revenue Unrealized Interest Revenue COGS Rent 49,521 48,932 18,532 18,532 36,000 13,452 125,000 12,500 102,915 34,100 36,000 13,452 125,000 2,500 102,915 34,100 (36,000) (13,452 (125,000 (12,500 (102,915 in excess par P/S 1,500 1,500 1,500 275 27,200 4,960 27,200 4,960 27,200 4,960 11,275 19,121 1,275 1,275 Bad Debt nse-Furniture 700 700 Net Income

Explanation / Answer

Daniels Consulting, Inc. Income Statement Year ended December 31, 2017 Tutorial note Income statement Particulars Amount ($) Sales revenue 102915 Service revenue 34100 COGS -56610 Gross profit 80405 Operating expenses: Rent expense -27200 Utilities expense -4960 Supplies expense -455 Salaries expense -11275 Interest expense -19121 It is assumed that the interest expense includes amortisation of discount on bonds payable Bad debt expense -488 Bank expense -113 Depreciation expense-equipment -780 Deprciation expense-furniture -700 Total operating expenses -65092 Opearting income 15313 Other income and expenses: Unrealized holding G/L -1500 Interest revenue 275 Total other income/ (expenses) -1225 Net income 14088 Daniels Consulting, Inc. Statement of retained earnings Year ended December 31, 2017 Retained earnings, January 1, 2017 Add: net income 14088 Retained earnings, December 31, 2017 14088 Daniels Consulting, Inc. Balance Sheet December 31, 2017 Current assets: Tutorial note Cash 689323 Accounts receivable 1100 Allowance for bad debts -312 Allowance for bad debts is set off against total accounts receivable Accounts receivable - net 788 Office supplies 15 Software inventory 300 Prepaid rent 0 Short term investment-trading 4500 FV adjustment-trading -1500 Fair value adjustment is adjusted with the Investment value Short term investment-trading 3000 Total current assets 693426 Plant assets: Land 271485 Equipment 7200 Accumulated depreciation-equipment -840 Equipment 6360 Furniture 6000 Accumulated depreciation-Furniture -750 Furniture 5250 Total plant assets 283095 Total assets 976521 Current liabilities: Accounts payable 1010 Unearned revenue 900 Salaries payable 0 Interest payable 18532 Total current liabilities 20442 Long term liabilities: Long-term note payable 303970 Bonds payable 500000 Discount on bonds payable -48932 Bonds payable - net 451068 Total long term liabilities 755038 Total liabilities 775480 Shareholders' equity Common stock 36000 Paid in capital in excess par C/S 13452 Preferred stock 125000 Paid in capital in excess par P/S 12500 Retained earnings 14088 Shareholders' equity 201040 Total liabilities and shareholders' equity 976520 Check -1 Daniels Consulting, Inc. Statement of cash flows Year ended December 31, 2017 Net income 14088 Adjustments to reconcile net income to net cash: Operating activities: Non cash and non operating expenses/(income): Interest expense 19121 Bank expense 113 Depreciation expense-equipment 780 Deprciation expense-furniture 700 Unrealized holding G/L 1500 Interest revenue -275 Operating cash before working capital changes 36027 Working capital changes Accounts receivable 2812 Office supplies 285 Software inventory -300 Prepaid rent 0 Short term investment -4500 Accounts payable -2590 Unearned revenue -900 Salaries payable -685 Interest payable 18532 Working capital changes 12654 Provided by operating activities 48681 Investing activities: Purchase of equipment -3600 Purchase of furniture -3000 Purchase of land -271485 Interest revenue 275 Used in investing activities -277810 Financing activities: Redemption of Daniel's capital -22255 Issue of common stock (including premium) 49452 Issue of preferred stock (including premium) 137500 Issue of bonds 451068 Issue of long term notes 303970 Interest and bank expense -19234 Financing activities 900501 Net increase/decrease in cash 671372 Opening cash 17950 Closing cash 689323 Check -1

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