Cash 127,000   Accounts Receivable 151,000   Allowance for Bad-Debts   12,500 Merchandise Inventory 187,500   Store Supplies 58,000   Prepaid Insurance 72,000   Prepaid Rent 56,000   Furniture & Fixtures 800,000   Accumulated Depreciation: Furniture & Fixtures   256,000 Computer Equipment 450,000   Accumulated Depreciation: Computer Equipment     Accounts Payable   133,500 Salaries Payable     Interest Payable   27,000 Unearned Sales Revenue   82,000 Long-Term Loan   360,000 Eva Ready, Capital   898,500 Eva Ready, Withdrawals 104,000   Sales Revenue   1,043,000 Sales Discount 7,000   Sales Returns & Allowances 5,500   Cost of Goods Sold 403,000   Salaries Expense 165,000   Insurance Expense     Utilities Expense 87,500   Rent Expense 126,000   Depreciation Expense – Furniture & Fixtures     Depreciation Expense – Computer Equipment     Store Supplies Expense     Gain on Disposal of Old Computer Equipment   14,000 Bad-Debt Expense     Interest Expense

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Landry Medical Services

Trial Balance as at June 30, 2020

 

Dr $

Cr $

Cash

127,000

 

Accounts Receivable

151,000

 

Allowance for Bad-Debts

 

12,500

Merchandise Inventory

187,500

 

Store Supplies

58,000

 

Prepaid Insurance

72,000

 

Prepaid Rent

56,000

 

Furniture & Fixtures

800,000

 

Accumulated Depreciation: Furniture & Fixtures

 

256,000

Computer Equipment

450,000

 

Accumulated Depreciation: Computer Equipment

 

 

Accounts Payable

 

133,500

Salaries Payable

 

 

Interest Payable

 

27,000

Unearned Sales Revenue

 

82,000

Long-Term Loan

 

360,000

Eva Ready, Capital

 

898,500

Eva Ready, Withdrawals

104,000

 

Sales Revenue

 

1,043,000

Sales Discount

7,000

 

Sales Returns & Allowances

5,500

 

Cost of Goods Sold

403,000

 

Salaries Expense

165,000

 

Insurance Expense

 

 

Utilities Expense

87,500

 

Rent Expense

126,000

 

Depreciation Expense – Furniture & Fixtures

 

 

Depreciation Expense – Computer Equipment

 

 

Store Supplies Expense

 

 

Gain on Disposal of Old Computer Equipment

 

14,000

Bad-Debt Expense

 

 

Interest Expense

_     27,000

________

Total

2,826,500

2,826,500

The following additional information is available at June 30, 2020:

(i) Store Supplies on hand at June 30, 2020 amounted to $25,000.

(ii) Insurance of $72,000 was paid on May 1, 2020 for the 6-months to October 31, 2020

(iii) Rent was paid on March 31, 2020 for the 4-months to July 31, 2020.

(iv) The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $160,000.

(v) The computer equipment was acquired on March 31, 2020 and is being depreciated over 5 years on the double-declining balance method of depreciation, down to a residue of $30,000  

(vi) Salaries earned by employees not yet paid amounted to $14,000 at June 30, 2020.

(vii) Accrued interest expense as of June 30, 2020, $9,000.

(viii) At June 30, 2020, $48,000 of the previously unearned sales revenue had been earned

(ix) The aging of the Accounts Receivable schedule at June 30, 2020 indicated that the Allowance for Bad Debts should be $19,500

(x) After making all other adjustments, a physical count of inventory was done, which

reveals that there was $186,000 worth of inventory on hand at June 30,2020

Other data:

(xi) The business is expected to make principal payments totalling $90,000 towards the loan during the fiscal year to June 30 ,2021

Required:

a) Prepare the necessary adjusting journal entries on June 30, 2020.

b) Prepare the Adjusted Trial balance for the period ending June 30, 2020.

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