Eric Baker began operations as a private investigator on January 1, 2014 (A+ Guaranteed)

Eric Baker began operations as a private investigator on January 1, 2014. The trial balance columns of the worksheet for Eric Baker, P.I., Inc. at March 31 are as follows.

Eric Baker P.I., Inc.

Worksheet

For the Quarter Ended March 31, 2014

Trial Balance

Account Titles     Dr.      Cr.

Cash             11,410

Accounts Receivable 5,920

Supplies           1,250

Prepaid Insurance 2,400

Equipment         30,000

Notes Payable              10,000

Accounts Payable           12,350

Common Stock               20,000

Dividends          600

Service Revenue             14,200

Salaries and Wages Expense 2,240

Travel Expense     1,300

Rent Expense        1,200

Miscellaneous Expense 230

56,550 56,550

Other data:

1.Supplies on hand total $480.

2.Depreciation is $720 per quarter.

3.Interest accrued on 6-month note payable, issued January 1, $300.

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

5.Services provided but unbilled at March 31 total $1,080.

Instructions

(a) Enter the trial balance on a worksheet and complete the worksheet.

(b) Prepare an income statement and a retained earnings statement for the quarter and a classified balance sheet at March 31.

(c) Journalize the adjusting entries from the adjustments columns of the worksheet.

(d) Journalize the closing entries from the financial statement columns of the worksheet.

Here’s the SOLUTION

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