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 Cash Accounts receivable Supplies Prepaid rent Inventory Office equipment Accumulated depreciation Accounts payable Salaries payable Notes payable (long-term) Common stock Retained earnings Dividends Sales revenue Cost of goods sold Interest expense Salaries expense Rent expense Supplies expense Utility expense Totals Debits $ 51,760 23,000 Credits 2,700 21,000 54,000 67,000 $ 8,710 26,600 3,200 28,800 80,000 15,300 6,000 215,000 112,500 0 34,750 0 0 4,900 $ 377,610 $ 377,610 Information necessary to prepare the year-end adjusting entries appears below. 1. 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. 2. Accrued salaries at year-end should be $4,800. 3. The company borrowed $28,800 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%. 4. The company debits supplies when supplies are purchased. Supplies on hand at year-end cost $420. 5. Prepaid rent expired during the period is $13,700. Cash dividends paid to shareholders during the year amounted to $6,000.

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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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.

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
Cash
Accounts receivable
Debits
$ 51,760
Credits
23,000
2,700
Supplies
Prepaid rent
Inventory
Office equipment
Accumulated depreciation
Accounts payable
Salaries payable
Notes payable (long-term)
Common stock
Retained earnings
Dividends
Sales revenue
Cost of goods sold
Interest expense
Salaries expense
Rent expense
Supplies expense
Utility expense
Totals
21,000
54,000
67,000
$ 8,710
26,600
3,200
28,800
80,000
15,300
6,000
215,000
112,500
0
34,750
0
0
4,900
$ 377,610
$ 377,610
Information necessary to prepare the year-end adjusting entries appears below.
1. 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.
2. Accrued salaries at year-end should be $4,800.
3. The company borrowed $28,800 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%.
4. The company debits supplies when supplies are purchased. Supplies on hand at year-end cost $420.
5. Prepaid rent expired during the period is $13,700.
Cash dividends paid to shareholders during the year amounted to $6,000.

Complete the worksheet below.
Account Title
Unadjusted Trial
Balance
Adjusting Entries
Adjusted Trial
Balance
Income Statement
Balance Sheet
Debit
Credit
Debit
Credit
Debit
Credit
Debit
Credit
Debit
Credit
Cash
$ 51,760
Accounts receivable
23,000
Supplies
2,700
Prepaid rent
21,000
Inventory
54,000
Office equipment
67,000
Accumulated depreciation
$ 8,710
Accounts payable
26,600
Salaries payable
3,200
Notes payable (long-term)
28,800
Interest payable
0
Common stock
80,000
Retained earnings
15,300
Dividends
6,000
Sales revenue
215,000
Cost of goods sold
112,500
Interest expense
Salaries expense
34,750
Rent expense
Supplies expense
Utilities Expense
4,900
Depreciation expense
Net income
Totals
377,610 377,610
$
0 $
0 $
0 $
0
69
$
0 $
0 $
0 $
0 $
0 $
0 $
0 $
0

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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