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P4-7 Recording Adjusting and Closing Entries and Preparing a Balance Sheet and Income Statement Including Earnings per Share LO4-1, 4-2, 4-4
Tunstall, Inc., a small service company, keeps its records without the help of an accountant. After much effort, an outside accountant
prepared the following unadjusted trial balance as of the end of the annual accounting period, December 31, 2014:
	Account Titles	Debit	Credit
	Cash	$ 42,000
	Accounts receivable	11,600
	Supplies	900
	Prepaid insurance	800
	Service trucks	19,000
	Accumulated depreciation		$ 9,200
	Other assets	8,300
	Accounts payable		3000
	Wages payable
	Income taxes payable
	Note payable (3 years; 10% interest due each December 31)		17000
	Common stock (5,000 shares outstanding)		400
	Additional paid-in capital		19000
	Retained earnings		6000
	Service revenue		61360
	Remaining expenses (not detailed; excludes income tax)	33,360
	Income tax expense
	Totals	$ 115,960	$ 115,960
Data not yet recorded at December 31, 2014, included:
a.	The supplies count on December 31, 2014, reflected $300 remaining supplies on hand to be used in 2015.
b.	Insurance expired during 2014, $800.
c.	Depreciation expense for 2014, $3,700.
d.	Wages earned by employees not yet paid on December 31, 2014, $640.
e.	Income tax expense, $5,540.
Required:
1	Record the 2014 adjusting entries. (If no entry is required for a transaction/event,
	select "No journal entry required" in the first account field.)
Transaction	General Journal	Debit	Credit
a.
b.
c.
d.
e.
Required:
2-a.	Prepare an income statement that includes the effects of the preceding five transactions.
	(Round "Earnings per share" to 2 decimal places.)
	TUNSTALL, INC.
	Income Statement
	For the Year Ended December 31, 2014
	Operating revenue:
	Operating expenses:
	Total expenses	-
	Net income	$16,720
	Earnings per share
Required:
2-b.	Prepare a classified balance sheet that includes the effects of the preceding five transactions.
	(Amounts to be deducted should be indicated by a minus sign.)
				TUNSTALL, INC.
				Balance Sheet
				At December 31, 2014
				Assets		Liabilities and Stockholders Equity
				Current assets:		Current liabilities:
				Total current assets	-	Total current liabilities	-
						Total liabilities	-
						Stockholders' equity:
						Total stockholders' equity	-
				Total assets	$ -	Total liabilities and stockholders' equity	$ -
Required:
3	Record the 2014 closing entry. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Transaction	General Journal	Debit	Credit
1

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