Everett Co. was organized on July 1, 2015. Quarterly financial statements are prepared. The unadjusted and adjusted trial balances as of September 30 are shown below.
|
EVERETT CO. Trial Balance September 30, 2015
|
| Unadjusted |
Adjusted |
| Dr. |
Cr. |
Dr. |
Cr. |
| Cash |
$ 8,728 |
$ 8,728 |
| Accounts Receivable |
10,418 |
11,456 |
| Supplies |
1,455 |
680 |
| Prepaid Rent |
2,214 |
1,215 |
| Equipment |
18,300 |
18,300 |
| Accumulated Depreciation-Equipment |
$ - 0 - |
$ 694 |
| Notes Payable |
9,700 |
9,700 |
| Accounts Payable |
2,529 |
2,529 |
| Salaries and Wages Payable |
- 0 - |
710 |
| Interest Payable |
- 0 - |
97 |
| Unearned Rent Revenue |
1,913 |
1,027 |
| Common Stock |
22,160 |
22,160 |
| Dividends |
1,578 |
1,578 |
| Service Revenue |
16,231 |
17,269 |
| Rent Revenue |
1,423 |
2,309 |
| Salaries and Wages Expense |
7,820 |
8,530 |
| Rent Expense |
1,931 |
2,930 |
| Depreciation Expense |
694 |
| Supplies Expense |
775 |
| Utilities Expense |
1,512 |
1,512 |
| Interest Expense |
97 |
| $ 53,956 |
$ 53,956 |
$ 56,495 |
$ 56,495 |
Step 1: Prepare a statement of retained earnings for the 3 months ending September 30, 2015. (List items that increase retained earnings first.)
Step 2: Prepare a balance sheet at September 30. (List assets in order of liquidity.)
Step 3: If the note bears interest at 12%, how many months has it been outstanding?