A. Copy Table 1 to the Trial Balance excel sheet and complete the worksheet.
B. Prepare the adjusting entries of AAA Services, below relevant information for the preparation of adjusting entries of AAA at 30 of June 2018.
Office supplies having original cost $8640were unused till the end of the period. Office supplies having original cost of $45,600 are shown on unadjusted trial balance.
Prepaid rent of $72,000 was paid for the months June, July and August.
The equipment costing $160,000 has useful life of 10 years and its estimated salvage value is $28,000. Depreciation is provided using the straight line depreciation method assume that this equipment acquired on 1 st of July 2017.
The interest rate on $40,000 note payable is 9%. Accrue the interest for one month.
$3,000 worth of service has been provided to the customer who paid advance amount of $4,000.
C. Prepare an income statement on the Income statement excel sheet.
D. Prepare a statement of changes in equity on the Changes in equity excel sheet
E. Prepare a balance sheet on the Balance sheet excel sheet.
F. What are the advantages and disadvantages using Excel spreadsheets for preparing financial reports? Give academic references to justify your answers Type your answers on excel sheet Part F in NOT more than 500 words.
| AAA Services | ||||||||||
| Worksheet | ||||||||||
| for the year end 30 Jun 2018 | ||||||||||
| Trial Balance | Adjusting Entries | Adjusted Trial Balance | Income Statement | Balance Sheet | ||||||
| Accounts Name | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit |
| Cash | 40860 | 40860 | 40860 | |||||||
| Accounts Receivable | 11800 | 11800 | 11800 | |||||||
| Office Supplies | 45600 | 36960 | 8640 | 8640 | ||||||
| Prepaid Rent | 72000 | 24000 | 48000 | 48000 | ||||||
| Equipment | 160000 | 160000 | 160000 | |||||||
| Accum. Depreciation - Equipment | 13200 | 13200 | 13200 | |||||||
| Accounts Payable | 10400 | 10400 | 10400 | |||||||
| Notes Payable | 40000 | 40000 | 40000 | |||||||
| Utilities Payable | 7928 | 7928 | 7928 | |||||||
| Interest Payable | 300 | 300 | 300 | |||||||
| Unearned Revenue | 8000 | 3000 | 5000 | 5000 | ||||||
| Common Stock | 200000 | 200000 | 200000 | |||||||
| Service Revenue | 165200 | 3000 | 168200 | 168200 | ||||||
| Wages Expense | 76400 | 76400 | 76400 | |||||||
| Miscellaneous Expense | 6940 | 6940 | 6940 | |||||||
| Electricity Expense | 4940 | 4940 | 4940 | |||||||
| Telephone Expense | 2988 | 2988 | 2988 | |||||||
| Supplies Expense | 36960 | 36960 | 36960 | |||||||
| Rent Expense | 24000 | 24000 | 24000 | |||||||
| Depreciation Expense | 13200 | 13200 | 13200 | |||||||
| Interest Expense | 300 | 300 | 300 | |||||||
| Dividend | 10000 | 10000 | 10000 | |||||||
| Total | 431528 | 431528 | 77460 | 77460 | 445028 | 445028 | 165728 | 168200 | 279300 | 276828 |
| Profit for the month | 2472 | 2472 | ||||||||
| 77460 | 77460 | 445028 | 445028 | 168200 | 168200 | 279300 | 279300 | |||
| AAA Services | ||||||||||
| Journal Entries | ||||||||||
| Date | Particulars | Debit | Credit | |||||||
| 30-06-2018 | Supplies Expense | 36960 | ||||||||
| Office Supplies | 36960 | |||||||||
| 30-06-2018 | Rent Expense | 24000 | ||||||||
| Prepaid Rent | 24000 | |||||||||
| 30-06-2018 | Depreciation Expense | 13200 | ||||||||
| Accumulated Depreciation - Equipment | 13200 | |||||||||
| 30-06-2018 | Interest Expense | 300 | ||||||||
| Interest Payable | 300 | |||||||||
| 30-06-2018 | Unearned Revenue | 3000 | ||||||||
| Service Revenue | 3000 | |||||||||
| AAA Services | ||||||||||
| Income Statement | ||||||||||
| for the year ended June 30,2018 | ||||||||||
| Particulars | Amount | |||||||||
| Service Revenue | 1,68,200 | |||||||||
| TOTAL REVENUE | 1,68,200 | |||||||||
| Wages Expense | -76,400 | |||||||||
| Miscellaneous Expense | -6,940 | |||||||||
| Electricity Expense | -4,940 | |||||||||
| Telephone Expense | -2,988 | |||||||||
| Supplies Expense | -36,960 | |||||||||
| Rent Expense | -24,000 | |||||||||
| Depreciation Expense | -13,200 | |||||||||
| TOTAL OPERATING EXPENSES | -1,65,428 | |||||||||
| NET OPERATING PROFIT | 2,772 | |||||||||
| Interest Expense | -300 | |||||||||
| NET PROFIT FOR THE PERIOD | 2,472 | |||||||||
| AAA Service | ||||||||||
| Statement of Change in Equity | ||||||||||
| for the period ended June 30,2018 | ||||||||||
| Particulars | Common Stock | Retained Earnings | TOTAL | |||||||
| Balance as on 1 July 2017 | 2,00,000 | 0 | 2,00,000 | |||||||
| Add: Net Profit for the period | 2,472 | 2,472 | ||||||||
| Less: Dividends | -10,000 | -10,000 | ||||||||
| Balance as on 30 June 2018 | 2,00,000 | -7,528 | 1,92,472 | |||||||
| AAA Services | ||||||||||
| Balance Sheet | ||||||||||
| as on June 30,2018 | ||||||||||
| Particulars | Amount | |||||||||
| Current Assets: | ||||||||||
| Cash | 40,860 | |||||||||
| Accounts Receivable | 11,800 | |||||||||
| Office Supplies | 8,640 | |||||||||
| Prepaid Rent | 48,000 | |||||||||
| TOTAL CURRENT ASSETS | 1,09,300 | |||||||||
| Non-Current Assets: | ||||||||||
| Equipment | 1,60,000 | |||||||||
| Accum. Depreciation - Equipment | -13,200 | |||||||||
| TOTAL NON-CURRENT ASSETS | 1,46,800 | |||||||||
| TOTAL ASSETS | 2,56,100 | |||||||||
| Current Liabilities: | ||||||||||
| Accounts Payable | 10,400 | |||||||||
| Utilities Payable | 7,928 | |||||||||
| Unearned Revenue | 5,000 | |||||||||
| Interest Payable | 300 | |||||||||
| TOTAL CURRENT LIABILITIES | 23,628 | |||||||||
| Non-Current Liabilities: | ||||||||||
| Notes Payable | 40,000 | |||||||||
| TOTAL NON-CURRENT LIABILITIES | 40,000 | |||||||||
| TOTAL LIABILITIES | 63,628 | |||||||||
| Equity: | ||||||||||
| Capital | 2,00,000 | |||||||||
| Retained Earnings | -7,528 | |||||||||
| TOTAL EQUITY | 1,92,472 | |||||||||
| TOTAL LIABILITIES & EQUITY | 2,56,100 | |||||||||
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