One year ago, Allan Thorpe founded Alcazar Sales Company, and the business has prospered. Allan comes to you for advice. He wishes to know how much net income the business earned during the past year. The accounting records consist of the T-accounts in the ledger, which were prepared by an accountant who has resigned from the company. The accounts at December 31, are as follows:Could you briefly explained how you got these answers please CashAccounts receivableDec 31 Bal5,800Dec 31 Bal12,300Prepaid rentSupplies2-Jan2,8002-Jan2,600EquipmentAccumulated depreciation- equipment2-Jan 52,000Accounts payableSalary payableDec 31 Bal 18,500Unearned service revenueAllan Thorpe, capitalDec 31 Bal4,1002-Jan40,000Allan Thorpe, drawingService revenueDec 31 Bal 50,000Dec 31 Bal80,700Salary expenseDepreciation expenseDec 31 Bal 17,000Advertising expenseUtilities expenseDec 31 Bal800Supplies expenseRent expense Allan indicates that, at year-end, customers owe him $1,000 accrued servicerevenue, which he expects to collect early next year. These revenues have notbeen recorded. During the year, he collected $4,100 service revenue in advancefrom customers, but the business has earned only $800 of that amount. Duringthe year he has incurred $2,400 of advertising expense, but he has not yet paidfor it. In addition, he has used up $2,100 of the supplies. Allan determines thatdepreciation on equipment was $7,000 for the year. At December 31, he oweshis employee $1,200 accrued salary. The rent paid in advance on Jan 2 for$2,800 relates to the period January 2019 through to February 2020. The ownermade no capital investments during the year.Allan expresses concern that drawing during the year might have exceeded thebusiness's net income. To get a loan to expand the business, Allan must showthe bank that the business's owner's equity has grown from its original $40,000balance. You and Allan agree that you will meet again ine week.Requirement:1. Prepare the journal entries for the transactions that were not previouslyrecorded, prepare and update the T-accounts and determine the endingbalance on all accounts used by the company.2. Prepare the adjusted trial balance for the company.3. Prepare the 2019 company's financial statements for presentation to the bankand to help address the first issue concerning Allan.4. Has the owner's equity grown from its original $40,000 balance.? Can Mr.Thorpe expect to get the loan? Give your reason(s).

Name: One year ago, Allan Thorpe founded Alcazar Sales Company, and the busi
Uploaded: 2024-03-04T10:43:15.000Z
Channel: Bartleby
Description: One year ago, Allan Thorpe founded Alcazar Sales Company, and the business has prospered. Allan comes to you for advice. He wishes to know how much net income the business earned during the past year. The accounting records consist of the T-accounts