ACC 290 Week 4 Apply: Connect Assignment

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:
 

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

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

c.      Rent of $2,000 expired during the month.

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



Required:

1.     Complete the worksheet for the month.

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

3.     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:

2.     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:

1.     Prepare an income statement.

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

3.     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?
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