Jyoti Nivas College Principles of Financial Accounting Worksheet i need help on attachment 1 and 2content:preparing a trial balance, closing jouranl entry, and post- closing trial balanceanalyzing and recording adjusting journal entries PA4-1 Preparing a Trial Balance, Closing Journal Entry, and Post-closing Trial Balance
LO 4-39, 4-50
Starbooks Corporation provides an online bookstore for electronic books. The following is a simplified list of accounts
and amounts reported in its accounting records. The accounts have normal debit or credit balances. Assume the year
ended on September 30, 2018.
$ 200
500
100
Accounts Payable
Accounts Receivable
Accumulated Depreciation
Cash
Common Stock
Deferred Revenue
Depreciation Expense
Equipment
Income Tax Expense
Interest Revenue
$ 600 Notes Payable (long-term)
300 Notes Payable (short-term)
900 Prepaid Rent
300
Rent Expense
200
Retained Earnings
200 Salaries and Wages Expense
300 Service Revenue
3,200 Supplies
300 Supplies Expense
100
Travel Expense
400
1,500
2,200
6,200
500
200
2,600
Required:
1. Prepare an adjusted trial balance at September 30, 2018. Is the Retained Earnings balance of $1,500 the amount
that would be reported on the balance sheet as of September 30, 2018?
2. Prepare the closing entry required at September 30, 2018.
3. Prepare a post-closing trial balance at September 30, 2018.
PA4-2 Analyzing and Recording Adjusting Journal Entries LO 4-1, 4-2, 4-6
Brokeback Towing Company is at the end of its accounting year, December 31, 2018. The following data that must be
considered were developed from the company’s records and related documents:
a. On July 1, 2018, a two-year insurance premium on equipment in the amount of $600 was paid and debited in full to
Prepaid Insurance on that date. Coverage began on July 1.
b. At the end of 2018, the unadjusted balance in the Supplies account was $1,000. A physical count of supplies on
December 31, 2018, indicated supplies costing $300 were still on hand.
c. On December 31, 2018, YY’s Garage completed repairs on one of Brokeback’s trucks at a cost of $800. The amount
is not yet recorded. It will be paid during January 2019.
d. On December 31, 2018, the company completed a contract for an out-of-state company for $7,950 payable by the
customer within 30 days. No cash has been collected and no journal entry has been made for this transaction.
e. On July 1, 2018, the company purchased a new hauling van. Depreciation for July-December 2018, estimated to
total $2,750, has not been recorded.
f. As of December 31, the company owes interest of $500 on a bank loan taken out on October 1, 2018. The interest
will be paid when the loan is repaid on September 30, 2019. No interest has been recorded yet.
g. Assume the income after the preceding adjustments but before income taxes was $30,000. The company’s federal
income tax rate is 30%. Compute and record income tax expense.
Required:
Page 200
1. Give the adjusting journal entry required for each item at December 31, 2018.
2. If adjustments were not made each period, the financial results could be materially misstated. Determine the
amount by which Brokeback’s net income would have been understated, or overstated, had the adjustments in
requirement i not been made.
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