Ready Hospital Supplies Trial Balance as at June 30, 2020 Dr $ Cr $ Cash 127,000 Accounts Receivable 151,000 Allowance for Bad-Debts 12,500 Merchandise Inventory 187,500 Store Supplies 58,000 Prepaid Insurance 72,000 Prepaid Rent 56,000 Furniture & Fixtures 800,000 Accumulated Depreciation: Furniture & Fixtures 256,000 Computer Equipment 450,000 Accumulated Depreciation: Computer Equipment Accounts Payable 133,500 Salaries Payable Interest Payable 27,000 Unearned Sales Revenue 82,000 Long-Term Loan 360,000 Eva Ready, Capital 898,500 Eva Ready, Withdrawals 104,000 Sales Revenue 1,043,000 Sales Discount 7,000 Sales Returns & Allowances 5,500 Cost of Goods Sold 403,000 Salaries Expense 165,000 Insurance Expense Utilities Expense 87,500 Rent Expense 126,000 Depreciation Expense – Furniture & Fixtures Depreciation Expense – Computer Equipment Store Supplies Expense Gain on Disposal of Old Computer Equipment 14,000 Bad-Debt Expense Interest Expense _ 27,000 ________ Total 2,826,500 2,826,500 Additional Information available at June 30, 2020: Store Supplies on hand at June 30, 2020 amounted to $25,000. Insurance of $72,000 was paid on May 1, 2020 for the 6-months to October 31, 2020 Rent was paid on March 31, 2020 for the 4-months to July 31, 2020. The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $160,000. The computer equipment was acquired on March 31, 2020 and is being depreciated over 5 years on the double-declining balance method of depreciation, down to a residue of $30,000 Salaries earned by employees not yet paid amounted to $14,000 at June 30, 2020. Accrued interest expense as of June 30, 2020, $9,000. At June 30, 2020, $48,000 of the previously unearned sales revenue had been earned The aging of the Accounts Receivable schedule at June 30, 2020 indicated that the Allowance for Bad Debts should be $19,500 After making all other adjustments, a physical count of inventory was done, which reveals that there was $186,000 worth of inventory on hand at June 30,2020 The business is expected to make principal payments totalling $90,000 towards the loan during the fiscal year to June 30 ,2021 Required: Prepare the necessary adjusting journal entries on June 30, 2020. [Narrations are not required] Prepare the Adjusted Trial balance for the period ending June 30, 2020. Using the Adjusted trial balance, generate the statements requested by MNB, i.e. A Multiple-step Income Statement & a Statement of Owner’s Equity for the year ended June 30, 2020 A classified balance sheet, in report format, at June 30, 2020.

Ready Hospital Supplies Trial Balance as at June 30, 2020 Dr $ Cr $ Cash 127,000 Accounts Receivable 151,000 Allowance for Bad-Debts 12,500 Merchandise Inventory 187,500 Store Supplies 58,000 Prepaid Insurance 72,000 Prepaid Rent 56,000 Furniture & Fixtures 800,000 Accumulated Depreciation: Furniture & Fixtures 256,000 Computer Equipment 450,000 Accumulated Depreciation: Computer Equipment Accounts Payable 133,500 Salaries Payable Interest Payable 27,000 Unearned Sales Revenue 82,000 Long-Term Loan 360,000 Eva Ready, Capital 898,500 Eva Ready, Withdrawals 104,000 Sales Revenue 1,043,000 Sales Discount 7,000 Sales Returns & Allowances 5,500 Cost of Goods Sold 403,000 Salaries Expense 165,000 Insurance Expense Utilities Expense 87,500 Rent Expense 126,000 Depreciation Expense – Furniture & Fixtures Depreciation Expense – Computer Equipment Store Supplies Expense Gain on Disposal of Old Computer Equipment 14,000 Bad-Debt Expense Interest Expense _ 27,000 ________ Total 2,826,500 2,826,500 Additional Information available at June 30, 2020: Store Supplies on hand at June 30, 2020 amounted to $25,000. Insurance of $72,000 was paid on May 1, 2020 for the 6-months to October 31, 2020 Rent was paid on March 31, 2020 for the 4-months to July 31, 2020. The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $160,000. The computer equipment was acquired on March 31, 2020 and is being depreciated over 5 years on the double-declining balance method of depreciation, down to a residue of $30,000 Salaries earned by employees not yet paid amounted to $14,000 at June 30, 2020. Accrued interest expense as of June 30, 2020, $9,000. At June 30, 2020, $48,000 of the previously unearned sales revenue had been earned The aging of the Accounts Receivable schedule at June 30, 2020 indicated that the Allowance for Bad Debts should be $19,500 After making all other adjustments, a physical count of inventory was done, which reveals that there was $186,000 worth of inventory on hand at June 30,2020 The business is expected to make principal payments totalling $90,000 towards the loan during the fiscal year to June 30 ,2021 Required: Prepare the necessary adjusting journal entries on June 30, 2020. [Narrations are not required] Prepare the Adjusted Trial balance for the period ending June 30, 2020. Using the Adjusted trial balance, generate the statements requested by MNB, i.e. A Multiple-step Income Statement & a Statement of Owner’s Equity for the year ended June 30, 2020 A classified balance sheet, in report format, at June 30, 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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Ready Hospital Supplies

Trial Balance as at June 30, 2020

	Dr $	Cr $
Cash	127,000
Accounts Receivable	151,000
Allowance for Bad-Debts		12,500
Merchandise Inventory	187,500
Store Supplies	58,000
Prepaid Insurance	72,000
Prepaid Rent	56,000
Furniture & Fixtures	800,000
Accumulated Depreciation: Furniture & Fixtures		256,000
Computer Equipment	450,000
Accumulated Depreciation: Computer Equipment
Accounts Payable		133,500
Salaries Payable
Interest Payable		27,000
Unearned Sales Revenue		82,000
Long-Term Loan		360,000
Eva Ready, Capital		898,500
Eva Ready, Withdrawals	104,000
Sales Revenue		1,043,000
Sales Discount	7,000
Sales Returns & Allowances	5,500
Cost of Goods Sold	403,000
Salaries Expense	165,000
Insurance Expense
Utilities Expense	87,500
Rent Expense	126,000
Depreciation Expense – Furniture & Fixtures
Depreciation Expense – Computer Equipment
Store Supplies Expense
Gain on Disposal of Old Computer Equipment		14,000
Bad-Debt Expense
Interest Expense	_ 27,000	________
Total	2,826,500	2,826,500

Additional Information available at June 30, 2020:

Store Supplies on hand at June 30, 2020 amounted to $25,000.
Insurance of $72,000 was paid on May 1, 2020 for the 6-months to October 31, 2020
Rent was paid on March 31, 2020 for the 4-months to July 31, 2020.
The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $160,000.
The computer equipment was acquired on March 31, 2020 and is being depreciated over 5 years on the double-declining balance method of depreciation, down to a residue of $30,000
Salaries earned by employees not yet paid amounted to $14,000 at June 30, 2020.
Accrued interest expense as of June 30, 2020, $9,000.
At June 30, 2020, $48,000 of the previously unearned sales revenue had been earned
The aging of the Accounts Receivable schedule at June 30, 2020 indicated that the Allowance for Bad Debts should be $19,500
After making all other adjustments, a physical count of inventory was done, which reveals that there was $186,000 worth of inventory on hand at June 30,2020
The business is expected to make principal payments totalling $90,000 towards the loan during the fiscal year to June 30 ,2021

Required:

Prepare the necessary adjusting journal entries on June 30, 2020. [Narrations are not required]
Prepare the Adjusted Trial balance for the period ending June 30, 2020. Using the Adjusted trial balance, generate the statements requested by MNB, i.e. A Multiple-step Income Statement & a Statement of Owner’s Equity for the year ended June 30, 2020
A classified balance sheet, in report format, at June 30, 2020.

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