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    Adjusted Trial Balance, Income Statement, and Memo

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    You are just starting an internship at a small public accounting firm. You receive a memo from the intern supervisor that outlines the assignment.

    - Include one excel folder with different tabs for the adjusted trial balance, the income statement, and the balance sheet. A multi-step income statement and a classified balance sheet.
    - Write a memo.
    - You will need to add appropriate accounts in order to make the adjusting entries. Some adjustments will require you to add two accounts, others only one.

    Cardinal Accounting
    To: New intern Date: January 5, 2015
    From: S. Stern, Intern Supervisor Subject: Summertime Co.

    Prepare adjusting entries, an adjusted trial balance and financial statements for Summertime for 2014. Please start by putting the accounts in chart-of-accounts order and splitting the amounts between debits and credits. You will need the following information to make the adjusting entries.
    - Bad debt expense is expected to be 1% of sales for the year
    - Depreciation expense for the year is $5,000
    - Summertime issued the 6% note payable on July 1, 2014, and interest is payable each June 30th thereafter.
    - Summertime issued the 9% note receivable on March 1, 2014 and expects to receive payment of both the interest and principle on March 1, 2015.
    - Employees have earned $6,200 in salaries that will be paid in January.
    - Two-thirds of the unearned rent revenue was earned in 2014.
    - The income tax rate is 30% and will be paid in January.

    Summertime Co.
    Unadjusted trial balance, 12/31/14

    Accounts payable 32,000
    Accounts receivable 43,700
    Accumulated depreciation - equipment 20,000
    Allowance for uncollectible accounts 3,500
    Cash 50,000
    Common stock 46,000
    Cost of goods sold 116,000
    Equipment 45,000
    Inventory 60,000
    Land 2,600
    Note payable (due 7/1/2018) 50,000
    Note receivable (due 3/1/2015) 30,000
    Prepaid rent 1,200
    Rent expense 21,800
    Retained earnings 20,000
    Salaries expense 51,200
    Sales revenue 244,000
    Unearned rent revenue 6,000

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    Solution Summary

    This solution provides assistance with the finance questions.