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Tunstall, Inc., A Small Service Company, Keeps Its Records Without The Help Of An Accountant.

22 Jun Tunstall, Inc., A Small Service Company, Keeps Its Records Without The Help Of An Accountant.

Posted at 16:38h in College by
P4-7 Recording Adjusting and Closing Entries and Preparing a Balance Sheet and Income Statement
Including Earnings per Share LO4-1, 4-2, 4-4
Tunstall, Inc., a small service company, keeps its records without the help of an accountant. After much effort, an outside accountant prepared the following unadjusted trial balance as of the end of the annual accounting period, December 31, 2014:
Account Titles  Debit Credit
  Cash          $42,000
  Accounts receivable           11,600
   Supplies                900
  Prepaid insurance               800
   Service trucks           19,000
  Accumulated depreciation         $9,200
  Other assets            8,300
  Accounts payable           3,000
  Wages payable
  Income taxes payable
  Note payable (3 years; 10% interest due each December 31)         17,000
  Common stock (5,000 shares outstanding)             400
  Additional paid-in capital         19,000
  Retained earnings           6,000
  Service revenue         61,360
  Remaining expenses (not detailed; excludes income tax)          33,360
   Income tax expense
      Totals       $115,960     $115,960
Data not yet recorded at December 31, 2014, included:
a. The supplies count on December 31, 2014, reflected $300 remaining supplies on hand to be used in 2015.
b. Insurance expired during 2014, $800.
c. Depreciation expense for 2014, $3,700.
d. Wages earned by employees not yet paid on December 31, 2014, $640.
e. Income tax expense, $5,540.
Required:
1 Record the 2014 adjusting entries. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)
Required:
2-a. Prepare an income statement that includes the effects of the preceding five transactions. (Round “Earnings per share” to 2 decimal places.)
 Required:
2-b. Prepare a classified balance sheet that includes the effects of the preceding five transactions. (Amounts to be deducted should be indicated by a minus sign.)
Required:
3 Record the 2014 closing entry. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)

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