Nick Mwendwa operates a private landscaping business called Mabustani Enterprise. Some clients are required to pay in advance for the services, while others are billed after the services have been rendered. Advance payments are credited to an account entitled Unearned Fees, which represents unearned revenue. The business adjusts its accounts and closes its accounts at the end of each quarter. At March 31, 2018, the end of the first quarter of the year, the unadjusted trial balance appeared as follows: Sh Sh Cash 17,150 Fees receivable 37,800 Unexpired insurance 1,600 Prepaid rent 5,400 Garden supplies 1,620 Lawn equipment 17,100 Accumulated depreciation: office equipment 5,700 Accounts payable 3,900 Unearned fees 24,000 Nick Mwenda, capital 45,300 Nick Mwenda, drawings 3,200 Fees earned 33,320 Depreciation expense 0 Rent expense 3,000 Office supplies expense 450 Insurance expense 800 Telephone expense 1,200 Travel expense 3,400 Salaries expense 19,500 112,220 112,220 Additional information: i. The depreciation expense with respect to lawn equipment for the first quarter was estimated at Sh.855. ii. The unearned fees account includes fees of Sh.8, 400 earned during the month by performing services for clients who had paid in advance. iii. Salaries earned by employees during the month but not yet recorded or paid amounted to Sh.1, 665. iv. The prepaid rent amount represents three months’ rent paid in advance on March 1. v. Landscaping services during the month but not yet collected or billed to clients amounted to Sh.3, 900 vi. Garden supplies on hand on March 31 amounted to Sh.700 Required: a) Prepare the adjusting entries required at March 31, 2018. b) Prepare the Statement of income for Mabustani Enterprise for the quarter ended March 31, 2018 c) Prepare the Statement of financial position for Mabustani Enterprises as at March 31, 2018
Nick Mwendwa operates a private landscaping business called Mabustani Enterprise. Some clients are required to pay in advance for the services, while others are billed after the services have been rendered. Advance payments are credited to an account entitled Unearned Fees, which represents unearned revenue. The business adjusts its accounts and closes its accounts at the end of each quarter. At March 31, 2018, the end of the first quarter of the year, the unadjusted
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|
Sh |
Sh |
|
Cash |
17,150 |
|
|
Fees receivable |
37,800 |
|
|
Unexpired insurance |
1,600 |
|
|
Prepaid rent |
5,400 |
|
|
Garden supplies |
1,620 |
|
|
Lawn equipment |
17,100 |
|
|
Accumulated |
|
5,700 |
|
Accounts payable |
|
3,900 |
|
Unearned fees |
|
24,000 |
|
Nick Mwenda, capital |
|
45,300 |
|
Nick Mwenda, drawings |
3,200 |
|
|
Fees earned |
|
33,320 |
|
Depreciation expense |
0 |
|
|
Rent expense |
3,000 |
|
|
Office supplies expense |
450 |
|
|
Insurance expense |
800 |
|
|
Telephone expense |
1,200 |
|
|
Travel expense |
3,400 |
|
|
Salaries expense |
19,500 |
|
|
|
112,220 |
112,220 |
Additional information:
i. The depreciation expense with respect to lawn equipment for the first quarter was estimated at Sh.855.
ii. The unearned fees account includes fees of Sh.8, 400 earned during the month by performing services for clients who had paid in advance.
iii. Salaries earned by employees during the month but not yet recorded or paid amounted to Sh.1, 665.
iv. The prepaid rent amount represents three months’ rent paid in advance on March 1.
v. Landscaping services during the month but not yet collected or billed to clients amounted to Sh.3, 900
vi. Garden supplies on hand on March 31 amounted to Sh.700
Required:
a) Prepare the
b) Prepare the Statement of income for Mabustani Enterprise for the quarter ended March 31, 2018
c) Prepare the
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