Financial Accounting: An Integrated Statements Approach, 2nd Edition

Chapter 4 Accounting Information Systems 193

The data for year-end adjustments are as follows:

a. Fees earned but not yet billed, $7.

b. Supplies on hand, $3.

c. Insurance premiums expired, $6.

d. Depreciation expense, $5.

e. Wages accrued but not paid, $1.

Prepare the adjusting entries for Ithaca Services Co.

Based upon the data in Exercise 4-26, adjust the account balances shown and prepare an ad-

justed trial balance for Ithaca Services Co.

Based upon the data in Exercise 4-27, prepare an income statement, retained earnings statement,

and balance sheet for Ithaca Services Co.

Exercise 4-27

Adjusting trial balance

Goals3, 4

Total debit column, $213

Exercise 4-28

Financial statements

Goal 4

Net income, $18

Ithaca Services Co.

Unadjusted Trial Balance

January 31, 2006

Debit Credit

Balances Balances

Cash 8

Accounts Receivable 50

Supplies 8

Prepaid Insurance 12

Land 50

Equipment 32

Accumulated Depreciation—Equipment 2

Accounts Payable 26

Wages Payable 0

Capital Stock 20

Retained Earnings 92

Dividends 8

Fees Earned 60

Wages Expense 16

Rent Expense 8

Insurance Expense 0

Utilities Expense 6

Depreciation Expense 0

Supplies Expense 0

Miscellaneous Expense 2

Totals 200 200