Trial balance and Income sheet
The trial balance of Shannah Security Services Inc. as of January 1, 2020 had the following normal balances:
Accounts receivable 13,500
Prepaid rent 3,200
Merchandise inventory (24 @Kshs265; 1 @Kshs260) 6,620
Accounts payable 1,950
Unearned revenue 980
Salaries payable 1,000
Common stock 50,000
Retained earnings 47,800
The following transactions took place during 2020 for Shannah Security Services:
1. Paid the salaries payable from 2019.
2. On March 1, 2020, Shannah established aKshs100 petty cash fund to handle small expenditures.
3. Paid Kshs 4,800 on May 1, 2020, for one year's lease on the company van in advance.
4. Paid Kshs 7,200 on May 2,2020 for one year's office rent in advance.
5. Purchased Kshs 400 of supplies on account.
6. Purchased 100 alarm systems for Kshs 28,000 cash during the year.
7. Sold 102 alarm systems for Kshs 57,120. All sales were on account.
(Compute cost of goods sold using the FIFO cost flow method)
8. PaidKshs2,100 on accounts payable during the year.
9. Replenished the petty cash fund on August 1. At this time, the petty cash fund had onlyKshs7 of currency left. It contained the following receipts: office supplies expenseKshs23, cutting grass Kshs55, and miscellaneous Kshs14.
10. Billed Kshs 52,000 of monitoring services for the year.
11. Paid installers and other employees a total of Kshs25,000 cash for salaries.
12. Collected Kshs 89,300 of accounts receivable during the year.
13. Paid Kshs 3,600 of advertising expense during the year.
14. Paid Kshs 2,500 of utilities expense for the year.
15. Paid a dividend of Kshs10,000 to the shareholders.
1. Prepare the trial balance as at Dec 31, 2020 for Shannah Security Services Inc.
2. Prepare the income statement, statement of changes in equity and balance sheet for Shannah Security Services Inc.
No expert answers yet
Answers can only be accepted by verified, expert tutors.