QI ESTION # 3-PREPARATION OF BASIC FINANCIAL STATEMENT AND CLOSING ENTRIES The f

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QI ESTION # 3-PREPARATION OF BASIC FINANCIAL STATEMENT AND CLOSING ENTRIES The following are balances from the adjusted accounts of Lamb Consulting Company as at December 31s 2017, are as follows: Title Debit Credit Cash Accounts Receivable 4,000 Insurance Supplies-Office Office Furniture 6.400 1.700 Acc. Depreciation- Office Furniture Building Acc. Depreciation - Building Land Accounts Payable Salaries Payable Unearned Consulting Revenue Long-term Notes Payable George Lamb, Capital George Lamb, Withdrawals Consulting Fees Eamed Salaries Expense Utilities Expense Advertising Expense Interest Expense Insurance Expense Depreciation expense- Fumiture Depreciation Expense- Building TOTALS 2,800 164.000 68.400 98,000 5,900 9,856 4,963 34,995 29.800 2,500 218.986 55,650 7.680 7,500 3,520 1.500 1,000 3.650 $375.700 $375,700 Required: Please complete parts A -C on the following pages

Explanation / Answer

INCOME STATEMENT Revenue: Consulting fee 218,986.00 Expenses: Salaries     55,650.00 Utilities expense       7,680.00 Advertising expense       7,500.00 Interest expense       3,520.00 Insurance expense       1,500.00 Depreciation-Building       3,650.00 Depreciation Furniure       1,000.00     80,500.00 NET REVENUE 138,486.00 CHANGE IN EQUITY Net Revenue earned 138,486.00 Withdrawals       2,500.00 CHANGE - INCREASE IN EQUITY 135,986.00 BALANCE SHEET CURRENT ASSETS Cash       4,000.00 Account Receivable       5,600.00 Prepaid Insurance       6,400.00 Supplies Office       1,700.00     17,700.00 FIXED ASSETS Office Furnitur     13,000.00 Less: Accumulated Dep       2,800.00     10,200.00 Building 164,000.00 Less: Accumulated Dep     68,400.00     95,600.00 Land     98,000.00 TOTAL ASSETS 221,500.00 CURRENT LIABILITIES Account Payable       5,900.00 Salary Payable       9,856.00 Unearned Consulting revenue       4,963.00     20,719.00 Long Term Notes Payable     34,995.00 George Lamb: Capital     29,800.00 Less: Withdrawls       2,500.00 Add: Net revenue for the year 138,486.00 165,786.00 TOTAL LIABILITIES 221,500.00

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