Following is the unadjusted trial balance for Sun Energy Co. on December 31, 2017. Sun Energy Co. Unadjusted Trial Balance Year Ended December 31, 2017 Account Debit Credit Cash $5,000 Accounts Receivable 3,300 Merchandise Inventory 4,500 Buildings 2,400 Equipment 3,200 Accounts Payable $5,700 Salaries Payable 3,500 Common Stock 2,500 Dividends Sales Revenue 14,000 COGS 3,800 Salaries Expense 3,500 Totals $25,700 $25,700 You are also given the following supplemental information: • A pending lawsuit, claiming $2,500 in damages, is considered likely to favor the plaintiff and can be reasonably estimated. Sun Energy Co. believes a customer may win a lawsuit for $3,500 in damages, but the outcome is only reasonably possible to occur. Sun Energy calculated warranty expense estimates of $210.

Following is the unadjusted trial balance for Sun Energy Co. on December 31, 2017. Sun Energy Co. Unadjusted Trial Balance Year Ended December 31, 2017 Account Debit Credit Cash $5,000 Accounts Receivable 3,300 Merchandise Inventory 4,500 Buildings 2,400 Equipment 3,200 Accounts Payable $5,700 Salaries Payable 3,500 Common Stock 2,500 Dividends Sales Revenue 14,000 COGS 3,800 Salaries Expense 3,500 Totals $25,700 $25,700 You are also given the following supplemental information: • A pending lawsuit, claiming $2,500 in damages, is considered likely to favor the plaintiff and can be reasonably estimated. Sun Energy Co. believes a customer may win a lawsuit for $3,500 in damages, but the outcome is only reasonably possible to occur. Sun Energy calculated warranty expense estimates of $210.

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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