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Journal Entries, Trial Balance, Income Statement and Retained Earnings

*P2-6A Global Graphics Company was organized on January 1, 2002. At the end of the first
6 months of operations, the trial balance contained the following accounts.

Debits Credits
Cash $ 9,500 Notes Payable $ 17,000
Accounts Receivable 14,000 Accounts Payable 9,000
Equipment 45,000 Common Stock 25,000
Insurance Expense 1,800 Graphic Revenue 52,100
Salaries Expense 30,000 Consulting Revenue 6,000
Supplies Expense 3,700
Advertising Expense 1,900
Rent Expense 1,500
Utilities Expense 1,700
$109,100 $109,100

Analysis reveals the following additional data.
1. The $3,700 balance in Supplies Expense represents supplies purchased in January. At June
30, $1,300 of supplies was on hand.
2. The note payable was issued on February 1. It is a 12%, 6-month note.
3. The balance in Insurance Expense is the premium on a one-year policy, dated March 1,
2002.
4. Consulting fees are credited to revenue when received. At June 30, consulting fees of $1,100
are unearned.
5. Graphic revenue earned but unbilled at June 30 totals $2,000.
6. Depreciation is $2,000 per year.

Instructions
(a) Journalize the adjusting entries at June 30. (Assume adjustments are recorded every 6 months.)
(b) Prepare an adjusted trial balance.
(c) Prepare an income statement and a retained earnings statement for the 6 months ended June 30 and a balance sheet at June 30.

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Please find my response in the attached file.

*P2-6A Global Graphics Company was organized on January 1, 2002. At the end of the first
6 months of operations, the trial balance contained the following accounts.

Debits Credits
Cash $ 9,500 Notes Payable $ 17,000
Accounts Receivable 14,000 Accounts Payable 9,000
Equipment 45,000 Common Stock 25,000
Insurance Expense 1,800 Graphic Revenue 52,100
Salaries Expense 30,000 Consulting Revenue 6,000
Supplies Expense 3,700
Advertising Expense 1,900
Rent Expense 1,500
Utilities Expense 1,700
$109,100 $109,100

Analysis reveals the following additional data.
1. The $3,700 balance in Supplies Expense represents supplies purchased in January. At June
30, $1,300 of supplies was on hand.
2. The note payable was issued on February 1. It is a 12%, 6-month note.
3. The balance in Insurance Expense is the premium on a one-year ...

Solution Summary

This solution is comprised of a detailed explanation to answer the request of the assignment in text file.

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