Completing the accounting cycle The trial balance of Racer Internet, Inc., at March 31, 2012, follows:
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RACER INTERNET, INC. Trial Balance March 31, 2012 |
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|
|
Balance |
|
|
Account |
Debit |
Credit |
|
Cash |
$ 4,300 |
|
|
Accounts receivable |
15,100 |
|
|
Prepaid rent |
2,300 |
|
|
Supplies |
1,000 |
|
|
Equipment |
30,600 |
|
|
Accumulated depreciation |
|
$ 3,900 |
|
Accounts payable |
|
6,400 |
|
Salary payable |
|
|
|
Unearned service revenue |
|
5,800 |
|
Common stock |
|
4,000 |
|
Retained earnings |
|
23,000 |
|
Dividends |
4,100 |
|
|
Service revenue |
|
17,300 |
|
Salary expense |
3,000 |
|
|
Rent expense |
|
|
|
Depreciation expense |
|
|
|
Supplies expense |
|
|
|
Total |
$60,400 |
$60,400 |
Adjusting data at March 31, 2012:
- Unearned service revenue still unearned, $500.
- Prepaid rent still in force, $2,000.
- Supplies used during the month, $800.
- Depreciation for the month, $400.
- Accrued salary expense, $600.
Requirements
1. Journalize adjusting journal entries.
2. Enter the trial balance on a worksheet and complete the worksheet of Racer Internet.
3. Prepare the income statement, statement of retained earnings, and classified balance sheet in report form.
4. Using the worksheet data that you prepared, journalize the closing entries, and post the adjusting and closing entries to T accounts. Use dates and show the ending balance of each account.
5. Prepare a post closing trial balance.
6. Calculate the current and debt ratios for the company.