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Task2.2MidTermAssessmentTemplate-5.xlsx

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Case Study

Trial Balance (Excel format)

TopJob Inc. Consulting Services

Unadjusted Trial Balance

For the 12-month accounting period ended 31 December 2020

Account

Debit

Credit

Cash

319,010

Accounts receivable

94,340

Office supplies

880

Prepaid rent

4,400

Office equipment cost

90,000

Accumulated depreciation : office equipment

34,500

Accounts payable

4,400

Notes payable

50,000

Interest payable

750

Income taxes payable

14,900

Dividends payable

13,500

Unearned consulting fees

24,200

Capital stock (share capital)

226,100

Retained earnings

44,000

Dividends

3,500

Consulting fees earned (revenue)

450,000

Rent expense

12,100

Insurance expense

3,300

Office supplies expense

3,950

Depreciation expense : office equipment

16,500

Salaries expense

263,000

Utilities expense

7,380

Interest expense

750

Income taxes expense

43,240

TOTAL

862,350

Additional information (not taken into account in the above):

Check

- 0

1. Consulting fees to the value of $17 500 have been earned by TopJob, at December 31, but have not been recorded previously and have not been paid by the customers.

2. The company determined that $24 200 of previously unearned consulting fees, that had been paid by customers already in full, had now been earned at December 31.

3. After the year end stock count, final office supplies on hand at December 31 total $550

4. The company purchased all of its office equipment when it first began business. At that time, the total estimated useful life of the equipment was five years. There were no additional purchases of office equipment other than when the business first began.

5. The company prepaid its ten-month rent agreement on June 1, 2020. The company only has one property it rents. There have been no escalations in rent in the last 12 months.

6. The company prepaid its six-month insurance policy on December 1, 2020. The annual insurance cost has remained unchanged over the last 3 years. The insurance policy is renewed every 6 months. The company only has one policy covering all of its assets.

7. Accrued but unpaid salaries total $11 200 at December 31,2020.

8. On September 1, 2020, the company borrowed $50 000 by signing a twelve-month, 6 percent (per annum) note payable. This note is the only liability that accrues interest and the only note payable. The entire amount, plus interest, is due and will be repaid in full on August 31, 2021. No payments of interest or principal are made until August 31, 2021.

Adj Jnls & Trial Balance (a)

Question a part i
Prepare the necessary adjusting journal entries on December 31, 2020. Include narrations to your journal entries.
Journal Entries for December 2020
Journal No.	Description	Debit	Credit	Workings & Calculations
1
Narration:
2
Narration:
3
Narration:
4
Narration:
5
Narration:
6
Narration:
7
Narration:
8
Narration:
Question a part ii
In addition, prepare an adjusted trial balance dated December 31, 2020, taking into account the above adjusting journal entries.
Show your workings (calculations/T-accounts).
TopJob Inc. Consulting Services
ADJUSTED TRIAL BALANCE
For the 12-month accounting period ended 31 December 2020			Workings
	- 0	- 0
Check	- 0

IS BS RE (b)

	Question b
	Once you have completed the adjusted trial balance prepared in part a, prepare the following financial statements: a. Income statement b. Statement of retained earnings for the year ended December 31, 2020 c. Balance sheet dated December 31, 2020
	Prepare the templates for the financial statements in order to get the "disclosure marks"

Closing entries (c)

Question c

Prepare the necessary year-end closing entries

Closing entries

EQUITY

Date

Account

Debit

Credit

Capital stock

40,000

Retained earnings

77,800

TOTAL LIABILITIES AND EQUITY

ERROR:#REF!

After closing TB (d)

Question d
Prepare an after-closing trial balance.
TopJob Inc. Consulting Services
Post Closing Trial Balance
As at 31 December 2020
Totals	- 0	- 0
Check		- 0

Insurance, Rent & PPE (e,f & g)

	Question e
	Compute the company’s average monthly insurance expense for the 2020 year
	Question f
	Compute the company’s cash outflow (cash paid) to prepay the rent in June 1, 2020 for 10 months
	Question g
	If the company purchased all of its office equipment when it first incorporated (first commenced business), for how long has it been in business as of December 31, 2020? 5 points

Performance metrics (h)

	Question h
	Using the financial statements prepared in part b., evaluate the following performance metrics: • Profitability • Liquidity and • Solvency In addition, provide an explanation of the what the above metrics mean.
	PROFITABILITY
	Evaluate
	Explanation of Profitability Meaning
	LIQUIDITY
	Evaluate
	Explanation of Profitability Meaning
	Solvency
	Evaluate
	Explanation of Profitability Meaning