I'LL ACCEPT ANY KIND OF HELP!
Smith Consulting Company started the period with cash of $29,000, common stock of $15,000, and retained earnings of $14,000. Smith engaged in the following transactions in 2020:
Transactions during 2020
1. On January 1, 2020, purchased office furniture for $14,000.
2. On March 1, paid $6,000 for an insurance policy that provides coverage for 12 months beginning
immediately.
3. Purchased $2,000 of supplies for cash.
4. Provided $41,000 of services for cash.
5. Paid $9,200 for salaries expense.
6. On April 1, received $14,000 for services that will be performed over the next 12 months beginning
immediately.
Information for Adjusting Entries
7. The furniture had an estimated life of six years and a $2,000 salvage value.
8. Recognized the expired insurance.
9. An inventory of supplies showed $350 of supplies on hand as of December 31. 10. Recognized the revenue associated with Event 6 as of December 31.
Chart of Accounts
100 Cash
104 Accounts receivable
108 Prepaid insurance
112 Supplies
116 Office furniture
114 Accumulated depreciation 200 Accounts payable
204 Wages payable
208 Salaries payable
212 Taxes payable
218 Unearned revenue
300 Common stock
320 Retained earnings
400 Service revenue
900 Salaries expense
904 Depreciation expense
908 Insurance expense
910 Supplies expense
Requirements:
Using Excel
1. In journal entry form, record the transactions that occurred during 2020, items 1 through 6.
2. Prepared the unadjusted trial balance
3. In journal entry form, record the adjusting entries, items 7 through 10.
4. Prepare the Income Statement, in good form.
5. Prepare the Balance Sheet, in good form.
6. Prepare the Statement of Cash Flows, in good form.
Use the information from the financial statements to calculate the following ratios:
1. Debt ratio
2. Profit margin
3. Current ratio
Last period the company had the following for the corresponding ratios
Debt ratio = 32%
Profit margin = 52.60%
Current ratio = 23.06
How does the companys current performance compare to last periods? Provide a brief discussion of the companys performance. Your discussion should be at least 4 well-articulated sentences.
