Data for adjustments at December 31, 2015, are listed below and the unadjusted trial balance at the top of the following page. (a)Taipei International uses a perpetual inventory system. (b)An analysis of Accounts Receivable reveals that the appropriate year-end balance in Allowance for Bad Debts is $750 . (c)Equipment depreciation for the year totaled $32,000 . (d)A recheck of the inventory count revealed that goods costing $5,600 were wrongly excluded from ending inventory. The goods in question were not shipped until January 3, 2016. A related receivable for $8,200 was also mistakenly recorded. (e)Interest on the note payable has not been accrued. The note was issued on March 1, 2015, and the interest rate is 12% . (f)The balance in Insurance Expense represents $3,000 that was paid for a one-year policy on October 1. The policy went into effect on October 1. (g)Dividends totaling $7,800 were declared on December 25. The dividends will not be paid until January 15, 2016. No entry was made. INSTRUCTIONS: Journalize the necessary adjusting entries. (Ignore income tax effects.)Journalize the necessary closing entries. Prepare a post-closing trial balance. Can a company pay dividends in a year in which it has a net loss? Can a company owe income taxes in a year in which it has a net loss?
Data for adjustments at December 31, 2015, are listed below and the unadjusted
(a)Taipei International uses a perpetual inventory system.
(b)An analysis of
(c)Equipment
(d)A recheck of the inventory count revealed that goods costing $5,600 were wrongly excluded from ending inventory. The goods in question were not shipped until January 3, 2016. A related receivable for $8,200 was also mistakenly recorded.
(e)Interest on the note payable has not been accrued. The note was issued on March 1, 2015, and the interest rate is 12% .
(f)The balance in Insurance Expense represents $3,000 that was paid for a one-year policy on October 1. The policy went into effect on October 1.
(g)Dividends totaling $7,800 were declared on December 25. The dividends will not be paid until January 15, 2016. No entry was made.
INSTRUCTIONS:
Journalize the necessary
Prepare a post-closing trial balance.
Can a company pay dividends in a year in which it has a net loss? Can a company owe income taxes in a year in which it has a net loss?
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