prepare an adjusted journal entries and adjusted trial balance 1. Equipment is depreciated based on a 8-year life. The equipment has no salvage value. It was purchased on January 1, 2015. 2. The bad debt expense is estimated to be $1,450. They use the percentage of sales method allowed by GAAP. 3. The insurance was prepaid on January 1, 2018. It covers the period from January 1, 2018 thru December 31, 2019. 4. 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. 5. 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. 6. 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. A new staff account inadvertantly charged the full amount to expense. 7. 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. 8. 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. 9. The rent was paid in advance, for the full year, on January 1, 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
prepare an
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1. Equipment is 2. The 3. The insurance was prepaid on January 1, 2018. It covers the period from January 1, 2018 thru December 31, 2019. 4. 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. 5. 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. 6. 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. A new staff account inadvertantly charged the full amount to expense. 7. 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. 8. 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. 9. The rent was paid in advance, for the full year, on January 1, 2018. |
| Debit | Credit | |||
| Cash | $ 22,500 | |||
| 17,350 | ||||
| Allowance for Doubtful Accounts | $ 600 | |||
| Inventory, December 31 | 70,350 | |||
| Prepaid Insurance | 5,200 | |||
| Prepaid Rent | 15,000 | |||
| Equipment | 60,000 | |||
| 22,500 | ||||
| Accounts Payable | 17,000 | |||
| Notes Payable | 25,000 | |||
| Common Stock | 10,000 | |||
| 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 |
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