Reference no: EM132956465

Question - Begin with the following account balances for University Street Parking Garage (assume all accounts have normal balances) at December 19, 2019.

Accounts payable $16,700

Accounts receivable 39,200

Accumulated depreciation (equipment) 36,800

Cash 6,700

Common stock (20,000 shares) 100,000

Depreciation expense (equipment) 12,300

Dividends 6,300

Equipment 269,500

Income taxes expense 2,700

Income taxes payable 1,100

Interest expense 16,500

Interest payable 0

Interest income 4,100

Inventory 4,900

Investments 35,000

Notes payable (due May 2, 2025) 160,000

Prepaid rent (4 months) 36,400

Rent expense 94,400

Retained earnings, 12/31/2018 43,000

Service revenue, parking 224,600

Service revenue, repair 208,100

Supplies expense 36,900

Wages expense 233,600

Wages payable 0

Required -

1. For the following transactions, provide the necessary adjusting entries and update the account balances to appropriately reflect these adjusting entries:

i. University Street Parking rents space that requires a rental payment of $9,100 per month. University Street Parking has prepaid rent through March 31, 2020.

ii. At December 31, 2019, University Street Parking owes employees' wages of $12,500.

iii. University Street Parking should have total depreciation expense on equipment for 2019 of $14,300.

iv. The note payable of $160,000 has an interest rate of 6.75%. University Street Parking has paid interest through October 31, 2019.

2. Develop a properly classified income statement for 2019, retained earnings statement for 2019, and a properly classified balance sheet as of December 31, 2019, using the post-adjustment account balances.