ock Bottom Harbor Clothing Corporation Trial Balance December 31, 2018 Debit Credit Cash $ 22,500 Accounts Receivable 17,350 Allowance for Doubtful Accounts $ 600 Inventory, December 31 70,350 Prepaid Insurance 5,200 Prepaid Rent 15,000 Equipment 60,000 Accumulated Depreciation- Eqpuipment 22,500 Accounts Payable 17,000 Notes Payable 25,000 Common Stock 10,000 Retained Earnings 92,450 Sales Revenue 397,300 Cost of Goods Sold 207,400 Salaries Expense (sales) 59,850 Advertising Expense 26,700 Salaries Expense (administration) 76,300 Supplies Expense 4,200 Total $ 564,850 $ 564,850 Above is the unadjusted trial balance for Rock Bottom Harbor Clothing Corporation. They close their books of Dec 31st Equipment is depreciated based on a 8-year life. The equipment has no salvage value. It was purchased on January 1, 2015. The bad debt expense is estimated to be $1,450. They use the percentage of sales method allowed by GAAP. The insurance was prepaid on January 1, 2018. It covers the period from January 1, 2018 thru December 31, 2019. The sales team worked the last week in December, but will not be paid until January 5th. They earned $2,750 for the 5 days of work. The note payable is due next July (short term). The interest that has accrued on the loan is $1,850, but has not been paid or recorded as of December 21, 2018. Advertising was paid in advance on November 1, 2018. The amount was $1,100. The company plans to do a large spread, magazine advertisement on January 15, 2019. Office supplies on hand totaled $900. That same inexperienced staff accountant had charged the full $4,200 to expense even though all of the supplies had not been used at December 31. After an inventory count at year end, the staff accountant noted that the inventory market value was lower than what was on the books (cost). Market value is $68,250 on December 31. The rent was paid in advance, for the full year, on January 1, 2018. Prepare an adjusted trial balance at December 31, 2018. Note that the following additional accounts will be needed. Bad Debt Expense, Insurance Expense, Interest Expense, Prepaid Advertising, Supplies, Rent Expense

ock Bottom Harbor Clothing Corporation Trial Balance December 31, 2018 Debit Credit Cash $ 22,500 Accounts Receivable 17,350 Allowance for Doubtful Accounts $ 600 Inventory, December 31 70,350 Prepaid Insurance 5,200 Prepaid Rent 15,000 Equipment 60,000 Accumulated Depreciation- Eqpuipment 22,500 Accounts Payable 17,000 Notes Payable 25,000 Common Stock 10,000 Retained Earnings 92,450 Sales Revenue 397,300 Cost of Goods Sold 207,400 Salaries Expense (sales) 59,850 Advertising Expense 26,700 Salaries Expense (administration) 76,300 Supplies Expense 4,200 Total $ 564,850 $ 564,850 Above is the unadjusted trial balance for Rock Bottom Harbor Clothing Corporation. They close their books of Dec 31st Equipment is depreciated based on a 8-year life. The equipment has no salvage value. It was purchased on January 1, 2015. The bad debt expense is estimated to be $1,450. They use the percentage of sales method allowed by GAAP. The insurance was prepaid on January 1, 2018. It covers the period from January 1, 2018 thru December 31, 2019. The sales team worked the last week in December, but will not be paid until January 5th. They earned $2,750 for the 5 days of work. The note payable is due next July (short term). The interest that has accrued on the loan is $1,850, but has not been paid or recorded as of December 21, 2018. Advertising was paid in advance on November 1, 2018. The amount was $1,100. The company plans to do a large spread, magazine advertisement on January 15, 2019. Office supplies on hand totaled $900. That same inexperienced staff accountant had charged the full $4,200 to expense even though all of the supplies had not been used at December 31. After an inventory count at year end, the staff accountant noted that the inventory market value was lower than what was on the books (cost). Market value is $68,250 on December 31. The rent was paid in advance, for the full year, on January 1, 2018. Prepare an adjusted trial balance at December 31, 2018. Note that the following additional accounts will be needed. Bad Debt Expense, Insurance Expense, Interest Expense, Prepaid Advertising, Supplies, Rent Expense

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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Rock Bottom Harbor Clothing Corporation
Trial Balance
December 31, 2018

	Debit	Credit
Cash	$ 22,500
Accounts Receivable	17,350
Allowance for Doubtful Accounts		$ 600
Inventory, December 31	70,350
Prepaid Insurance	5,200
Prepaid Rent	15,000
Equipment	60,000
Accumulated Depreciation- Eqpuipment		22,500
Accounts Payable		17,000
Notes Payable		25,000
Common Stock		10,000
Retained Earnings		92,450
Sales Revenue		397,300
Cost of Goods Sold	207,400
Salaries Expense (sales)	59,850
Advertising Expense	26,700
Salaries Expense (administration)	76,300
Supplies Expense	4,200
Total	$ 564,850	$ 564,850

Above is the unadjusted trial balance for Rock Bottom Harbor Clothing Corporation. They close their books of Dec 31st

Equipment is depreciated based on a 8-year life. The equipment has no salvage value. It was purchased on January 1, 2015.
The bad debt expense is estimated to be $1,450. They use the percentage of sales method allowed by GAAP.
The insurance was prepaid on January 1, 2018. It covers the period from January 1, 2018 thru December 31, 2019.
The sales team worked the last week in December, but will not be paid until January 5th. They earned $2,750 for the 5 days of work.
The note payable is due next July (short term). The interest that has accrued on the loan is $1,850, but has not been paid or recorded as of December 21, 2018.
Advertising was paid in advance on November 1, 2018. The amount was $1,100. The company plans to do a large spread, magazine advertisement on January 15, 2019.
Office supplies on hand totaled $900. That same inexperienced staff accountant had charged the full $4,200 to expense even though all of the supplies had not been used at December 31.
After an inventory count at year end, the staff accountant noted that the inventory market value was lower than what was on the books (cost). Market value is $68,250 on December 31.
The rent was paid in advance, for the full year, on January 1, 2018.

Prepare an adjusted trial balance at December 31, 2018. Note that the following additional accounts will be needed.

Bad Debt Expense, Insurance Expense, Interest Expense, Prepaid Advertising, Supplies, Rent Expense

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