Posted: August 28th, 2016

# Prepare an income statement?

necessary entries to journalize these transactions for the month of February.
Requirement 2
On February 28, Jones takes the following facts into account:
I. Feb. 28, 20×1. The supplies account had a balance of \$910 on Feb. 1, 20×1. Some supplies were used during the month. Jones determines that the original cost of the remaining supplies is \$260.
j. Jones accrues an additional \$30 in wages for the hours that Dave worked on Monday, February 28, 20×1; Dave’s wage for that pay period is scheduled for payment on Friday, March 4, 20×1.
k. Feb. 28, 20×1. Jones considers the prepayment made for advertising services on Feb. 2, 20×1, and makes an entry to account for advertising expense for the month of February, 20×1.
l. Feb. 28, 20×1. Interest of \$1220 has accrued on the note payable. The interest is scheduled for payment early in March.
Requirement 3
Using an accounting worksheet, Jones prepares a trial balance before making adjustments. Compute the worksheet,
showing the adjustments, and compute the ending (adjusted) balance amounts. Label each adjustment in parenthesis (i) – (l).
Requirement 4
Prepare an income statement, a statement of owners’ equity, and a balance sheet for Jake’s Computer Repair Service for the months ended February 28, 20x!. Use the adjusted trial balance amounts you computed in Requirement 3, and the template below.
Requirement 5
Jones recognizes utilities expense as soon as the utilities bill arrives, and recognizes service revenues only when the related service is performed (refer back to transaction c and e in Requirement (4). Which basis of accounting is Jones correctly applying?

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