Problem 3-3A Costello Advertising Agency Inc. was founded by Pat Costello in Jan

Question

Problem 3-3A Costello Advertising Agency Inc. was founded by Pat Costello in January of 2013. Presented below are both the adjusted and unadjusted trial balances as of December 31, 2014 COSTELLO ADVERTISING AGENCY, INC. Trial Balance December 31, 2014 Unadjusted Adjusted Cr Cr $11,501 20,937 8,451 3,478 75,300 $11,501 21,986 5,197 2,477 75,300 Cash Accounts Receivable Supplies Prepaid Insurance Equipment Accumulated Depreciation -Equipment Accounts Payable Interest Payable Notes Payable Unearned Service Revenue Salaries and Wages Payable Common Stock Retained Earnings Dividends Service Revenue Salaries and Wages Expense Insurance Expense Interest Expense Depreciation Expense $ 28,213 4,897 0 4,700 7,052 0 19,162 25,411 $34,488 4,897 188 4,700 6,071 1,711 19,162 25,411 12,873 12,873 58,700 60,730 11,016 12,727 1,001 615 6,275 427

Explanation / Answer

Answer: Journal entry:

Accounts receivable A/C Dr. $1049

To service revenue A/C $1049

Supplies expense A/C Dr. $3254

To Supplies A/C $3254

Insurance exp A/C Dr. $1001

To Prepaid insurance A/C $1001

Dep Expense A/C Dr. $6275

To Acc. Dep-Equipment A/C $6275

Interest expense A/C Dr. $188

To Interest payable A/C $188

Unearned service revenue A/C Dr. $981

To Service revenue A/C $981

Salaries and wages exp A/C Dr. $1711

To salaries and wages Payable A/C $1711

Answer:

Answer:

Answer:

COSTELLO ADVERTISING AGENCY INC. Income Statement For the year ended December 31,2014 Revenue: Service revenue 60730 Expenses: Salaries exp 12727 Dep exp 6275 Rent expense 4152 Supplies exp 3254 Insurance exp 1001 Interest exp 615 Total expenses 28024 Net income 32706

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