Saint Marys University Tahini & Jam Inc Accounting Question Worksheet

Question Description

Required: Prepare the proper ADJUSTING journal entries for the following events. Also, a balance sheet after adjusting entries have been made.

The unadjusted trial balance for Tahini & Jam Inc. appears below:

Tahini & Jam Inc.

Unadjusted Trial Balance

December 31, 2020

Debit Credit

Cash $75,500

Accounts receivable 5,000

Prepaid rent 1,000

Prepaid insurance 15,000

Supplies 3,000

Equipment 40,000

Accumulated depreciation-equipment $4,000

Accounts payable 11,000

Bank loan payable 10,000

Unearned service revenue 10,500

Common shares 48,250

Retained earnings 32,000

Dividends 5,000

Service revenue 44,600

Salary expense 7,200

Utilities expense 1,200

Rent expense 5,250

Advertising expense 2,200 ________

$160,350 $160,350

Additional data is as follows. Record the adjusting entry below the information.

a. Unearned service revenue NOT YET earned at year end, $2,000.

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b. Depreciation for the current year amounts to $4,500.

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c. Prepaid insurance consists of a policy purchased on January 1, 2020 for a 15 months coverage.

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d. Supplies on hand/counted at year end amount to $1,200.

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e. Accrued salaries on December 31, 2020, amount to $2,500.

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f. The bank loan was received on March 1, 2020, and the annual interest rate was 12%.

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g. Rent is $500/month, and January, 2021 rent is included in the trial balance amount.

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h. Corporate income tax is 20% of net income before tax.

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a balance sheet based on the unadjusted trial balance and the adjusting entries.

Record your answers below (in white).

Tahini & Jam Inc.

Balance Sheet

(As at December 31, 2020)

Prepare balance sheet here.

Tahini & Jam Inc.

Income Statement

(for the year ended

December 31, 2020)

Prepare balance sheet here.

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