Date Accounts Debit Credit

Dec-01 Cash 1,000

Common Stock 1,000

Dec-01 Cash 9,000

Long-term Notes Payable 9,000

Dec-01 Prepaid licenses and permits 750

Cash 750

Dec-01 Equipment 4,200

Cash 4,200

Dec-01 Prepaid Insurance 1,200

Cash 1,200

Dec-05 Inventory 15,000

Cash 4,500
Accounts Payable 10,500

Dec-22 Accounts Payable 3,000

Cash 3,000

Dec-25 Cash 17,500

Accounts Receivable 7,500
Sales Revenue 25,000

Cost of goods sold 11,000

Inventory 11,000

Dec-28 Cash 2,000

Deferred Revenue 2,000
 Dec-29 Cash 3,750
Accounts Receivable 3,750

Dec-30 Selling Expenses 3,500

Cash 3,500

Adjusting Entries
Dec-31 Interest Expense 75
Interest Payable 75
(9,000 x 10% x 1/12 = 75)

Dec-31 Licenses and permits Expense 63

Prepaid licenses and permits 63
(750 / 12 = 63)

Dec-31 Depreciation Expense 163

Accumulated Depreciation 163
(4,200 - 300) / 2 = 1,950; 1,950/12 = 162.50

Dec-31 Insurance Expense 100

Prepaid Insurance 100
(1,200 / 12 = 100)

Dec-31 Bad Debt Expense 375

Allowance for Bad Debt 375
(10% of ending gross accounts receivables)

Dec-31 Income Tax Expense 1,945

Income Tax Payable 1,945
(20% of income before taxes)
 Balance Sheet
Assets
Cash A/R ADA
DR CR DR CR DR CR
- - -
1,000 750 7,500 375
9,000 4,200 3,750
17,500 1,200
2,000 4,500
3,750 3,000
3,500
16,100 3,750 375

Inventory Equipment Accum Depreciation

DR CR DR CR DR CR
- - -
15,000 11,000 4,200 163

4,000 4,200 163

Prepaid licenses and

permits Prepaid Insurance
DR CR DR CR
- -
750 1,200
63 100

688 1,100

Liabilities
A/P Income Tax Payable LT Notes Payable
DR CR DR CR DR CR
- - -
10,500 1,945 9,000
 3,000

7,500 1,945 9,000

Deferred Revenue Interest Payable

DR CR DR CR
- -
2,000 75

2,000 75

Stockholders Equity

Retained Earnings Common Stock

DR CR DR CR
- -
1,000

- 1,000
 Income Statement

Sales Revenue COGS Selling Expense

DR CR DR CR DR CR
- - -
25,000 11,000 3,500

25,000 11,000 3,500

Interest Expense Insurance Expense Bad Debt Expense

DR CR DR CR DR CR
- - -
75 100 375

75 100 375

Licenses and permits

Depreciation Expense Expense Income Tax Expense
DR CR DR CR DR CR
- - -
163 63 1,945

163 63 1,945
 WorkSheet
Unadjusted Trial Balance Unadjusted TB Adjustments
Accounts Title Debit Credit Debit
Cash 16,100
Accounts Receivable 3,750
Allowance for Bad Debt -
Inventory 4,000
Equipment 4,200
Accumulated Depreciation -
Prepaid licenses and permits 750
Prepaid Insurance 1,200
Accounts Payable 7,500
Deferred Revenue 2,000
Interest Payable -
Income Tax Payable -
LT Notes Payable 9,000
Common Stock 1,000
Retained Earnings -
Sales Revenue 25,000
Cost of goods sold 11,000
Selling Expense 3,500
Insurance Expense - 100
Bad Debt Expense - 375
Depreciation Expense - 163
Licenses and permits Expense - 63
Interest Expense - 75
Income Tax Expense - 1,945
44,500 44,500 2,720
Net Income
Totals
 WorkSheet
Adjustments Adjusted TB Income Statement Balance Sheet
Credit Debit Credit Debit Credit Debit Credit
16,100 16,100
3,750 3,750
375 375 375
4,000 4,000
4,200 4,200
163 163 163
63 688 688
100 1,100 1,100
7,500 7,500
2,000 2,000
75 75 75
1,945 1,945 1,945
9,000 9,000
1,000 1,000
- -
25,000 25,000
11,000 11,000
3,500 3,500
100 100
375 375
163 163
63 63
75 75
1,945 1,945
2,720 47,058 47,058 17,220 25,000 29,838 22,058
7,780 7,780
25,000 25,000 29,838 29,838
 Danah Corporation
INCOME STATEMENT
For the Year Ended December 31, 2022
Operating Revenues
Sales Revenue 25,000
Cost of goods sold 11,000
Gross Profit 14,000
Operating Expenses
Selling Expense 3,500
Insurance Expense 100
Bad Debt Expense 375
Depreciation Expense 163
Licenses and permits Expense 63
Total operating expenses 4,200
Operating Income 9,800
Other Income (Expense)
Interest Expense (75)
Income before taxes 9,725
Income Tax Expense 1,945
Net Income $ 7,780
 Danah Corporation
Statement Of Retained Earnings
For the Year Ended December 31, 2022
Retained earnings, January 1 -
Add: Net Income 7,780
Less: Dividend 0
Retained earnings, December 31 7,780
 Danah Corporation
Balance Sheet
As at December 31, 2022
Assets
Current Assets
Cash 16,100
Accounts Receivable, Gross 3,750
Less: Allowance for Bad Debt (375)
Accounts Receivable, Net 3,375
Inventory 4,000
Prepaid licenses and permits 688
Prepaid Insurance 1,100
Total current assets 25,263
Property, Plant and Equipment
Equipment 4,200
Less: Accumulated Depreciation (163)
Total Property, Plant and Equipment 4,038
Total Assets $ 29,300

Liabilities and Equity

Current Liabilities
Accounts Payable 7,500
Deferred Revenue 2,000
Interest Payable 75
Income Tax Payable 1,945
Total current liabilities 11,520
Non-current Liabilities
LT Notes Payable 9,000
Total Liabilities 20,520

Stockholders' Equity
 Common Stock 1,000
Retained Earnings 7,780
Total Stockholder's Equity 8,780
Total Liabilities and Stockholders' Equity $ 29,300
$ -
 Danah Corporation
Statement Of Cash Flow
For the Year Ended December 31, 2022
Cash Flows from Operating Activities
Net Income $ 7,780
Adjustment to net cash provided by operating activities:
Increase in Accounts Receivable (3,750)
Increase in Inventory (4,000)
Increase in Prepaid licenses and permits (688)
Increase in Prepaid Insurance (1,100)
Increase in Accounts Payable 7,500
Increase in Deferred Revenue 2,000
Increase in Interest Payable 75
Increase in Income Tax Payable 1,945
Depreciation Expense 163
Bad Debts Expense 375 2,520
Net Cash from Operating Activities 10,300

Cash Flows from Investing Activities

Purchase of equipment (4,200)

Net Cash from Investing Activities (4,200)

Cash Flows from Financing Activities

Proceeds from issuance of common stock 1,000
Issuance of Long-term Notes Payable 9,000
Net Cash from Financing Activities 10,000

Net Increase In Cash 16,100

Cash, January 1 -
Cash, December 31 $ 16,100