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Practice Problem 3

The document outlines a practice problem for ABC Service's first month of operations, detailing an unadjusted trial balance and additional data for adjustments. It includes instructions for journalizing and posting adjusting entries, preparing financial statements, journalizing closing entries, and preparing a post-closing trial balance. The key adjustments involve insurance, supplies, depreciation, and accrued interest.

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ahmadiparwin89
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8 views1 page

Practice Problem 3

The document outlines a practice problem for ABC Service's first month of operations, detailing an unadjusted trial balance and additional data for adjustments. It includes instructions for journalizing and posting adjusting entries, preparing financial statements, journalizing closing entries, and preparing a post-closing trial balance. The key adjustments involve insurance, supplies, depreciation, and accrued interest.

Uploaded by

ahmadiparwin89
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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PRACTICE PROBLEM:

At the end of its first month of operations, ABC Service has the following unadjusted trial balance:

Other data:

1. Insurance expires at the rate of $200 per month.


2. $1,000 of supplies are on hand at August 31.
3. Monthly depreciation on the equipment is $900.
4. Interest of $500 on the notes payable has accrued during the month.

Instructions:

a) Journalize and post the adjusting entries


b) Prepare an income statement, an owner’s equity statement, and a balance sheet
c) Journalize the closing entries
d) Prepare a post-closing trial balance

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