Problem 38 Flint Advertising was founded by Murali Vedula in

Problem 3-8 Flint Advertising was founded by Murali Vedula in January 2015. Presented below are both the adjusted and unadjusted trial balances as of December 31, 2017 FLINT ADVERTISING TRIAL BALANCE DECEMBER 31, 2017 Unadjusted Dr Adjusted Dr Cr. Cr. Cash Accounts Receivable Supplies Prepaid Insurance Equipment $12,670 16,540 9,890 4,410 64,700 $12,670 19,986 6,723 2,706 64,700 $27,100 7,700 1,850 Notes Payable Accounts Payable Interest Payable Unearned Service Revenue Salaries and Wages Payable Common Stock Retained Earnings $32,290 7,700 1,850 539 3,741 788 19,940 12,910 5,460 19,940 12,910 10,600 10,600 59,710 64,875 Service Revenue Salaries and Wages Expense Insurance Expense Interest Expense Depreciation Expense Supplies Expense Rent Expense 10,468 1,704 539 5,190 3,167 6,180 9,680 6,180 $134,670 $134,670 $144,633 $144,633

Solution

A. Journal Entry.

Date

Particulars

Dr. Amount (in$)

Cr. Amount (in$)

1

Accounts Receivable

To Service Revenue

(Being accrued service revenue earned)

Note 1

3446

3,446

2

Supplies Expense

TO Supplies

(Being supplies used)

3,167

3,167

3

Insurance Expense

TO Prepaid Insurance

(Being insurance expired)

1,704

1,704

4

Depreciation

TO Accumulated Depreciation

5,190

5,190

5

Interest Expense

TO Interest Payable

(Being interest on note)

539

539

6

Unearned Service Revenue

To Service Revenue

(Being service earned)

1,719

1,719

7

Salaries & Wages Expense

TO Salaries & Wages Payable

788

788

B. Income Statement

Income Statement

Particulars

Amount

Income

Service Revenue

64,875

Expenses

Salaries & Wages

10,468

Supplies

3,167

Insurance

1,704

Depreciation

5,190

Rent

6,180

Interest

539

Total Expenses

27,248

Net Income

37,627

C. Retained Earnings

Retained Earnings

Particulars

Amount

Opening Balance of Retained Earnings

12,910

Add: Income earned during the year

32,627

Less: Dividends Paid

10,600

Closing Balance

34,937

Date	Particulars	Dr. Amount (in$)	Cr. Amount (in$)
1	Accounts Receivable To Service Revenue (Being accrued service revenue earned) Note 1	3446	3,446
2	Supplies Expense TO Supplies (Being supplies used)	3,167	3,167
3	Insurance Expense TO Prepaid Insurance (Being insurance expired)	1,704	1,704
4	Depreciation TO Accumulated Depreciation	5,190	5,190
5	Interest Expense TO Interest Payable (Being interest on note)	539	539
6	Unearned Service Revenue To Service Revenue (Being service earned)	1,719	1,719
7	Salaries & Wages Expense TO Salaries & Wages Payable	788	788