On December 31, 2019, Clean and White Linen Supplies Ltd. had the following account balances:CashS90,000Accumulated Depreciation, EquipmentS90,000Accounts Receivable96,000Accounts Payable60,000Inventory60,000Wages Payable8,000Supplies2,000Bank Loan Payable150,000Long-Term Investment80,000Common Shares250,000Equipment330,000Retained Earnings100,000In 2020, the following transactions occurred:On January 1, paid S4,200 for a three-year fire insurance policy.1.2.Purchased additional uniform inventory on credit for $147,10o.Sold uniforms for S192,100 on account. The inventory that was sold had been purchasedfor $100,000.3.Performed cleaning services for customers for $544,40o. One-quarter of this amount waspaid in cash and the remainder was on account.4.Paid $139,200 to suppliers to settle some of the accounts payable.Received $246,000 from customers to settle amounts owed to the company.7.Paid $15,200 for advertising.At the end of 2020, paid the interest on the bank loan for the year at the rate of 7%, aswell as $34,500 on the principal. The remaining principal balance is due in three years.8.9.Received a $3,000 dividend from the long-term investment.10.Paid $19,800 for utilities for the year.Declared and paid dividends of $13,100 at the end of the year.11.12.Paid $102,000 for wages during the year. At year end, the company owed another $2,000to the employees for the last week of work in December.Depreciated the equipment for the year. The company had bought its equipment at thebeginning of 2017, and it was expected to last 10 years and have a residual value ofS30,000. The company depreciates its equipment using the straight-line method.13.14.Made an adjustment for the cost of the insurance that expired in 2020.5.6.

Adjustments are made at the end of the year in order to make the necessary corrections and recording…

Answered: Made an adjustment for the cost of the…

Business

Accounting

Made an adjustment for the cost of the insurance that expired in 2020.

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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