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Tiva Solutions’ Accounting Records Reflect the Following Account Balances at December

question 210

Essay

Tiva Solutions’ accounting records reflect the following account balances at December 31, 2017:
$\begin{array} { l r l r } \text { Building } & \$ 560,000 & \text { Accumulated Depreciation- } & \$ 112,000 \\&& \text { Building } \\\\text { Cash } & 90,000 &\text { Capital Stock }& 343,000 \\\text { Supplies } & 5,000 & \text { Retained Earnings } & 200,000\end{array}$
During 2017, the following transactions occurred:

1. On March 1, purchased a one-year insurance policy for $1,200 cash.
2. On April 1, borrowed $10,000 cash from Rock City Bank. The interest rate on the note payable is 6%.
Principal and interest is due in cash in one year.
3. Employee salaries in the amount of $20,000 were paid in cash.
4. At the end of the year, $400 of the supplies remained on hand.
5. Earned $45,000 in tax consulting revenue during 2017 in cash.
6. At December 31, $5,000 in employee salaries were accrued.
7. On December 31, received $2,000 in cash representing advance payment for services to be provided in February 2018.
8. The building has a useful life of 25 years and no salvage value.

The building has a useful life of 25 years and no salvage value.

Required

A. Determine the effect on the accounting equation of the preceding transactions including any related year-end adjusting entries that may be required. Create a table to reflect the increases and decreases in accounts.
$Tiva Solutions’ accounting records reflect the following account balances at December 31, 2017: \begin{array} { l r l r } \text { Building } & \$ 560,000 & \text { Accumulated Depreciation- } & \$ 112,000 \\ && \text { Building } \\\ \text { Cash } & 90,000 &\text { Capital Stock }& 343,000 \\ \text { Supplies } & 5,000 & \text { Retained Earnings } & 200,000 \end{array} During 2017, the following transactions occurred: 1. On March 1, purchased a one-year insurance policy for $1,200 cash. 2. On April 1, borrowed $10,000 cash from Rock City Bank. The interest rate on the note payable is 6%. Principal and interest is due in cash in one year. 3. Employee salaries in the amount of $20,000 were paid in cash. 4. At the end of the year, $400 of the supplies remained on hand. 5. Earned $45,000 in tax consulting revenue during 2017 in cash. 6. At December 31, $5,000 in employee salaries were accrued. 7. On December 31, received $2,000 in cash representing advance payment for services to be provided in February 2018. 8. The building has a useful life of 25 years and no salvage value. The building has a useful life of 25 years and no salvage value. Required A. Determine the effect on the accounting equation of the preceding transactions including any related year-end adjusting entries that may be required. Create a table to reflect the increases and decreases in accounts. B. Prepare an income statement for Tiva Solutions for 2017. Ignore income tax effects. C. Prepare a classified balance sheet for Tiva Solutions at December 31, 2017.$ B. Prepare an income statement for Tiva Solutions for 2017. Ignore income tax effects.
C. Prepare a classified balance sheet for Tiva Solutions at December 31, 2017.

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