Transactions during 2020 follow:Borrowed $20,000 cash on July 1, 2020, signing a one-year, 10 percent note payable.Purchased equipment for $18,000 cash on July 1, 2020.Sold 10,000 additional shares of capital stock for cash at $0.50 market value per share at the beginning of the year.Earned $70,000 in revenues for 2020, including $14,000 on credit and the rest in cash.Incurred $27,000 in wages expense and $8,000 in miscellaneous expenses for 2020, with $7,000 on credit and the rest paid with cash. Note: Wages are paid in cash.Purchased additional small tools, $3,000 cash.Collected accounts receivable, $8,000.Paid accounts payable, $11,000.Purchased $10,000 of supplies on account.Received a $3,000 deposit on work to start January 15, 2021.Declared a cash dividend on December 1, $10,000; paid on December 31. Data for adjusting entries:Supplies of $4,000 and small tools of $8,000 were counted on December 31, 2020 (debit Miscellaneous Expenses).Depreciation for 2020, $2,000.Interest accrued on notes payable (to be computed).Wages earned since the December 24 payroll but not yet paid, $3,000.Income tax expense was $4,000, payable in 2021. Complete this question by entering your answers in the tabs below.Stmt ofStockholders Balance SheetEquityIncomeStatementPrepare a balance sheet. (Items to be deducted must be indicated with a minus sign.)FURNITURE REFINISHERS, INC.Balance SheetAt December 31, 2020AssetsLiabilitiesCurrent assets:Current liabilities:Accounts receivable$ 27,000Accounts payable$ 13,000Cash10,000Notes payable20,000Supplies4,000Wages payable3,000Small tools8,000Interest payable3,000 XIncome taxes payable1,000 XUnearned revenue4,000 XTotal current assets49,000Total current liabilities44,000Equipment18,000Stockholders' equityAccumulated depreciation(2,000)Common stock$ 7,000Other operating expenses9,000Additional paid-in capital13,000Equipment - Net book value25,000Retained earnings10,000Total stockholders' equity30,000Total liabilities and stockholders'Total assets$ 74,000$ 74,000equity Aubrae and Tylor Williamson began operations of their furniture repair shop (Furniture Refinishers, Inc.) on January 1, 2019.The annual reporting period ends December 31. The trial balance on January 1, 2020, was as follows:Furniture Refinishers, Inc.Trial Balance on January 1, 2020Account TitlesDebitCreditCash5,0004,0002,0006,000Accounts receivableSuppliesSmall toolsEquipmentAccumulated depreciation (on equipment)Other assets (not detailed to simplify)Accounts payableDividends payableNotes payable9,0007,000Wages payableInterest payableIncome taxes payableUnearned revenueCommon stock (60,000 shares, $0.10 par value)Additional paid-in capitalRetained earnings6,0009,0004,000Service revenueDepreciation expenseWages expenseInterest expenseIncome tax expenseMiscellaneous expensesTotals26,00026,000

The question is based on the concept of Financial Accounting.

Answered: ransactions during 2020 follow:…

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter3: The Adjusting Process

Section: Chapter Questions

Problem 5PB: Reece Financial Services Co., which specializes in appliance repair services, is owned and operated...

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Transactions during 2020 follow:

Borrowed $20,000 cash on July 1, 2020, signing a one-year, 10 percent note payable.
Purchased equipment for $18,000 cash on July 1, 2020.
Sold 10,000 additional shares of capital stock for cash at $0.50 market value per share at the beginning of the year.
Earned $70,000 in revenues for 2020, including $14,000 on credit and the rest in cash.
Incurred $27,000 in wages expense and $8,000 in miscellaneous expenses for 2020, with $7,000 on credit and the rest paid with cash. Note: Wages are paid in cash.
Purchased additional small tools, $3,000 cash.
Collected accounts receivable, $8,000.
Paid accounts payable, $11,000.
Purchased $10,000 of supplies on account.
Received a $3,000 deposit on work to start January 15, 2021.
Declared a cash dividend on December 1, $10,000; paid on December 31.

Data for adjusting entries:

Supplies of $4,000 and small tools of $8,000 were counted on December 31, 2020 (debit Miscellaneous Expenses).
Depreciation for 2020, $2,000.
Interest accrued on notes payable (to be computed).
Wages earned since the December 24 payroll but not yet paid, $3,000.
Income tax expense was $4,000, payable in 2021.

Complete this question by entering your answers in the tabs below.
Stmt of
Stockholders Balance Sheet
Equity
Income
Statement
Prepare a balance sheet. (Items to be deducted must be indicated with a minus sign.)
FURNITURE REFINISHERS, INC.
Balance Sheet
At December 31, 2020
Assets
Liabilities
Current assets:
Current liabilities:
Accounts receivable
$ 27,000
Accounts payable
$ 13,000
Cash
10,000
Notes payable
20,000
Supplies
4,000
Wages payable
3,000
Small tools
8,000
Interest payable
3,000 X
Income taxes payable
1,000 X
Unearned revenue
4,000 X
Total current assets
49,000
Total current liabilities
44,000
Equipment
18,000
Stockholders' equity
Accumulated depreciation
(2,000)
Common stock
$ 7,000
Other operating expenses
9,000
Additional paid-in capital
13,000
Equipment - Net book value
25,000
Retained earnings
10,000
Total stockholders' equity
30,000
Total liabilities and stockholders'
Total assets
$ 74,000
$ 74,000
equity

Aubrae and Tylor Williamson began operations of their furniture repair shop (Furniture Refinishers, Inc.) on January 1, 2019.
The annual reporting period ends December 31. The trial balance on January 1, 2020, was as follows:
Furniture Refinishers, Inc.
Trial Balance on January 1, 2020
Account Titles
Debit
Credit
Cash
5,000
4,000
2,000
6,000
Accounts receivable
Supplies
Small tools
Equipment
Accumulated depreciation (on equipment)
Other assets (not detailed to simplify)
Accounts payable
Dividends payable
Notes payable
9,000
7,000
Wages payable
Interest payable
Income taxes payable
Unearned revenue
Common stock (60,000 shares, $0.10 par value)
Additional paid-in capital
Retained earnings
6,000
9,000
4,000
Service revenue
Depreciation expense
Wages expense
Interest expense
Income tax expense
Miscellaneous expenses
Totals
26,000
26,000

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