Problems: Set B adjusting entries a P3-3B Ortega pared. The unadjusted and adjus

Question

Problems: Set B adjusting entries a P3-3B Ortega pared. The unadjusted and adjusted trial balances as of September 30 are s financial statements so 5, 6, 7) LO, Inc. was organized on July 1, 2008. Quarterly financial statements are pre- Prepare ORTEGA CO., INC. Trial Balance September 30, 2008 Unadjusted Adjusted Cr. Cr. Cash Accounts Receivable Supplies Prepaid Rent Equipment Accumulated Depreciation-Equipment Notes Payable Accounts Payable Salaries Payable Interest Payable Unearned Rent Common Stock Dividends Commission Revenue Rent Revenue Salaries Expense Rent Expense Depreciation Expense Supplies Expense Utilities Expense Interest Expense 6,700 400 1,200 1,500 15,000 $6,700 900 1,000 900 15,000 5,000 1,510 350 5,000 1,510 50 500 14,000 14,000 14,000 400 14,500 800 9,000 9,600 1,500 350 510 510 $35,810 $35,8 $37,310 $37,310 Instructions (a) Journalize the adjusting entries that were made. b) Prepare an income statement and a retained earnings statement for the 3 months ending (b) Net income $3,090 September 30 and a balance sheet at September 30. Ending retained earnings $2,490 Total assets $24,150

Explanation / Answer

a.

Journal entries:

Accounts receivable

To service revenue

$500

$500

Rent

To prepaid rent

$600

$600

Supplies expense

To supplies

$200

$200

Depreciation

To accummulated depreciation

$350

$350

Interest expense

To Interest payable

$50

$50

Unearned revenue

To rent revenue

$400

$400

Salaries expense

To salaries payable

$600

$600

Income statement

Statement of Retained earnings for month ended

Beginning retained earnings $0

Net income $3090

less: Dividend paid ($600)

Ending retained earnings $2490.

Balance sheet

Equipment $15000

Accummulated depreciation ($350)

Particulars Debit($) Credit($)

Accounts receivable

To service revenue

$500

$500

Rent

To prepaid rent

$600

$600

Supplies expense

To supplies

$200

$200

Depreciation

To accummulated depreciation

$350

$350

Interest expense

To Interest payable

$50

$50

Unearned revenue

To rent revenue

$400

$400

Salaries expense

To salaries payable

$600

$600

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