One year ago, Allan Thorpe founded Alcazar Sales Company, and the business has prospered. Allan comes to you for advice. He wishes to know how much net income the business

One year ago, Allan Thorpe founded Alcazar Sales Company, and the business has prospered. Allan comes to you for advice. He wishes to know how much net income the business earned during the past year. The accounting records consist of the T-accounts in the ledger, which were prepared by an accountant who has resigned from the company. The accounts at December 31, are as follows: Allan indicates that, at year-end, customers owe him $1,000 accrued service revenue, which he expects to collect early next year. These revenues have not been recorded. During the year, he collected $4,100 service revenue in advance from customers, but the business has earned only $800 of that amount. During the year he has incurred $2,400 of advertising expense, but he has not yet paid for it. In addition, he has used up $2,100 of the supplies. Allan determines that depreciation on equipment was $7,000 for the year. At December 31, he owes his employee $1,200 accrued salary. The rent paid in advance on Jan 2 for $2,800 relates to the period January 2019 through to February 2020. The owner made no capital investments during the year. Allan expresses concern that drawing during the year might have exceeded the business’s net income. To get a loan to expand the business, Allan must show the bank that the business’s owner’s equity has grown from its original $40,000 balance. You and Allan agree that you will meet again in one week. Requirement: 1.Prepare the journal entries for the transactions that were not previously recorded, prepare and update the T-accounts and determine the ending balance on all accounts used by the company. 2. Prepare the adjusted trial balance for the company. 3. Prepare the 2019 company’s financial statements for presentation to the bank and to address the first issue concerning Allan. Transcribed Image Text: Cash
Accounts receivable
Dec 31 Bal
5,800
Dec 31 Bal
12,300
Prepaid rent
2,800
Supplies
2,600
2-Jan
2-Jan
Accumulated depreciation- equipment
Equipment
52,000
2-Jan
Salary payable
Accounts payable
Dec 31 Bal
18,500
Unearned service revenue
Dec 31 Bal
Allan Thorpe, capital
2-Jan
4,100
40,000
Service revenue
Allan Thorpe, drawing
Dec 31 Bal
80,700
Dec 31 Bal
50,000
Depreciation expense
Salary expense
17,000
Dec 31 Bal Transcribed Image Text: Utilities expense
800
Advertising expense
Dec 31 Bal
Supplies expense
Rent expense

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