Professional Documents
Culture Documents
Karla Tanner opens a web consulting business called Linkworks and recorded the following
Apr. Tanner invests $80,000 cash along with office equipment valued at $26,000 in the company
Apr. The company prepaid $9,000 cash for twelve months rent for office space. The company's
Apr. The company made credit purchases for $8,000 in office equipment and $3,600 in office
Apr.
6 The company completed services for a client and immediately received $4,000 cash.
Apr.
9 The company completed a $6,000 project for a client, who must pay within 30 days.
Apr.
13 The company paid $11,600 cash to settle the account payable created on April 3.
Apr. The company paid $2,400 cash for the premium on a 12-month insurance policy. The
Apr.
22 The company received $4,400 cash as partial payment for the work completed on April 9.
Apr.
25 The company completed work for another client for $2,890 on credit.
Apr.
Apr.
Apr.
30 The company paid $435 cash for this months utility bill.
Descriptions of items that require adjusting entries on April 30, 2015, follow.
a) On April 2, the company prepaid $9,000 cash for twelve months' rent for office space.
The balance in Prepaid insurance represents the premium paid for a 12-month insurance
Straight-line depreciation of office equipment, based on a 5-year life and a $4,000 salvage
e) The company has completed work for a client, but has not yet billed the $1,800 fee.
f) Wages due to employees, but not yet paid, as of April 30 total $2,600.
General Journal tab -For each transaction, review the unadjusted balance and prepare
the adjusting entry necessary to correctly report the revenue earned or the expense
incurred. After adjusting the accounts, review the general ledger and trial balance for
accuracy.
General Ledger tab - Each journal entry is posted automatically to the general ledger.
Trial Balance tab - You may view either the unadjusted or adjusted trial balance by
choosing from the dropdown box below. Your choice will determine the reported values
Income Statement tab - Use the drop-downs to select the accounts properly included
on the income statement. The unadjusted or adjusted balances will appear for each
Balance Sheet tab - Use the drop-downs to select the accounts properly included on
the balance sheet. The unadjusted or adjusted balances will appear for each account,
Impact on Income tab -For each adjustment, indicate the income statement and
balance sheet account affected, and the impact on net income. If an adjustment caused
net income to decrease, enter the amount as a negative value. Net income before
adjustments can be found on the income statement tab. (Hint: Select unadjusted on
the dropdown.)
Santana Rey, owner of Business Solutions, decides to prepare a statement of cash flows for her
business. (Although the serial problem allowed for various ownership changes in earlier chapters, we
will prepare the statement of cash flows using the following financial data.)
Required:
Prepare a statement of cash flows for Business Solutions using the indirect method for the three months
ended March 31, 2016. Recall that the owner Santana Rey contributed $35,000 to the business in
exchange for additional stock in the first quarter of 2016 and has received $4,000 in cash