Excalibur Corporation sells video games for personal computers. The unadjusted trial balance as of December 31, 2024, appears below. December 31 is the company’s reporting year-end. The company uses the perpetual inventory system. Account Title Debits Credits Cash $ 68,725 Accounts receivable 27,500 Supplies 3,600 Prepaid rent 30,000 Inventory 67,500 Office equipment 85,000 Accumulated depreciation $ 11,050 Accounts payable 36,500 Salaries payable 5,000 Notes payable (long-term) 31,500 Common stock 125,000 Retained earnings 20,250 Dividends 9,375 Sales revenue 260,000 Cost of goods sold 135,000 Interest expense 0 Salaries expense 56,350 Rent expense 0 Supplies expense 0 Utility expense 6,250 Totals $ 489,300 $ 489,300 Information necessary to prepare the year-end adjusting entries appears below. The office equipment was purchased in 2022 and is being depreciated using the straight-line method over an eight-year useful life with no residual value. Accrued salaries at year-end should be $7,500. The company borrowed $31,500 on September 1, 2024. The principal is due to be repaid in 10 years. Interest is payable twice a year on each August 31 and February 28 at an annual rate of 10%. The company debits supplies when supplies are purchased. Supplies on hand at year-end cost $600. Prepaid rent expired during the period is $14,600. Cash dividends paid to shareholders during the year amounted to $9,375. Required: 1. Complete the worksheet below. 2-a. Use the information in the worksheet to prepare an income statement for 2024. 2-b. Use the information in the worksheet to prepare a statement of shareholders’ equity for 2024. 2-c. Use the information in the worksheet to prepare a balance sheet as of December 31, 2024. 3. Prepare the necessary closing entries assuming that adjusting entries have been correctly posted to the accounts.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Excalibur Corporation sells video games for personal computers. The unadjusted trial balance as of December 31, 2024, appears below. December 31 is the company’s reporting year-end. The company uses the perpetual inventory system.

Account Title	Debits	Credits
Cash	$ 68,725
Accounts receivable	27,500
Supplies	3,600
Prepaid rent	30,000
Inventory	67,500
Office equipment	85,000
Accumulated depreciation		$ 11,050
Accounts payable		36,500
Salaries payable		5,000
Notes payable (long-term)		31,500
Common stock		125,000
Retained earnings		20,250
Dividends	9,375
Sales revenue		260,000
Cost of goods sold	135,000
Interest expense	0
Salaries expense	56,350
Rent expense	0
Supplies expense	0
Utility expense	6,250
Totals	$ 489,300	$ 489,300

Information necessary to prepare the year-end adjusting entries appears below.

The office equipment was purchased in 2022 and is being depreciated using the straight-line method over an eight-year useful life with no residual value.
Accrued salaries at year-end should be $7,500.
The company borrowed $31,500 on September 1, 2024. The principal is due to be repaid in 10 years. Interest is payable twice a year on each August 31 and February 28 at an annual rate of 10%.
The company debits supplies when supplies are purchased. Supplies on hand at year-end cost $600.
Prepaid rent expired during the period is $14,600.

Cash dividends paid to shareholders during the year amounted to $9,375.