ACC 290 Week 4 Apply: Connect Assignment

Complete the Week 4 Assignment in Connect.

Note: You have only 1 attempt available to complete assignments

1

Paula Judge owns Judge Creative Designs. The trial balance of the firm for January 31, 2019, the first month of operations, is shown below.

End-of-the-month adjustments must account for the following items:

Supplies were purchased on January 1, 2019; inventory of supplies on January 31, 2019, is $1,500.

The prepaid advertising contract was signed on January 1, 2019, and covers a four-month period.

Rent of $2,000 expired during the month.

Depreciation is computed using the straight-line method. The equipment has an estimated useful life of 10 years with no salvage value.

Required:

Complete the worksheet for the month.

Prepare an income statement, statement of owner’s equity, and balance sheet. No additional investments were made by the owner during the month.

Journalize and post the adjusting entries.

Analyze

If the adjusting entries had not been made for the month, would net income be overstated or understated?

2

The trial balance of Neal Company as of January 31, 2019, after the company completed the first month of operations, is shown in the partial worksheet below.

Required:

Complete the worksheet by making the following adjustments: supplies on hand at the end of the month, $7,000; expired insurance, $6,900; depreciation expense for the period, $3,000.

Analyze:

How does the insurance adjustment affect Prepaid Insurance?

3

The completed worksheet for Cantu Corporation as of December 31, 2019, after the company had completed the first month of operation, appears below.

CANTU CORPORATION Worksheet Month Ended December 31, 2019
	Trial Balance		Adjustments		Adjusted Trial Balance		Income Statement		Balance Sheet
Account Name	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	76,600				76,600				76,600
Accounts Receivable	11,400				11,400				11,400
Supplies	8,900			5,400	8,900				3,500
Prepaid Advertising	10,800			1,800	10,800				9,000
Equipment	100,000				100,000				100,000
Accumulated Depreciation—Equipment				2,000		2,000				2,000
Accounts Payable		11,400				11,400				11,400
Selena Cantu, Capital		107,400				107,400				107,400
Selena Cantu, Drawing	6,600				6,600				6,600
Fees Income		112,900				112,900		112,900
Supplies Expense			5,400		5,400		5,400
Advertising Expense			1,800		1,800		1,800
Depreciation Expense-Equipment			2,000		2,000		2,000
Salaries Expense	16,200				16,200		16,200
Utilities Expense	1,200				1,200		1,200
Totals	231,700	231,700	9,200	9,200	233,700	233,700	26,600	112,900	207,100	120,800
Net Income							86,300			86,300
							112,900	112,900	207,100	207,100

Required:

Prepare an income statement.

Prepare a statement of owner’s equity. The owner made no additional investments during the month.

Prepare a balance sheet.

Analyze:

If the adjustment to Prepaid Advertising had been $3,600 instead of $1,800, what net income would have resulted?