TRIAL balance dated Dec 31, 2019 MUSIC-IS-US, INCTRIAL BALANCEDECEMBER 31, 2018 cash …………………………………………………. $ 45,000Marketable securities…………………………. 25,000 Accounts receivable…………………………… 125,000Allowance for doubtful accounts………… $5,000Merchandise inventory……………………….. 250,000Office supplies................................................... 1,200Prepaid insurance…………………………………… 6,600 Building and fixtures…………………………… 1,791,000 Accumulated depreciation………………………. 800,000 Land…………………………………………………... 64,800Accounts payable…………………………………… 70,000Unearned customer deposits…………………… 8,000Income taxes payable………………………………. 75,000Capital stock…………………………………………. 1,000,000Retained earnings.................................................. 240,200Unrealized holding gain on investments……… 6,000sales…………………………………………………. 1,600,000 Cost of goods sold…………………………………. 958,000Bank service charges……………………………… 200Uncollectible accounts expense………………….. 9,000Salary and wages expense……………………….. 395,000Office supplies expense…………………………… 400Insurance expense………………………………… 6,400Utilities expense……………………………………. 3,600Depreciation expense……………………………… 48,000Income tax expense…………………………… 75,000 $3,804,200 $3,804,200 Other information The most recent bank statement reports a balance of $46.975. Included with the bank statement was a $2,500 check from Iggy Smarts, a professional musician, charged back to Music-Is-Us as NSF. The bank's monthly service charge was $25. Three checks written by Music-Is-Us to suppliers of merchandise has no yet cleared the bank for payment as of the statement date. These cheques included: no. 508 $5,500; no. 511, $7,500: and no. 521, $8,000. Deposits of $16,500 reached the bank too late for inclusion in the current bank statement. The company prepare a bank reconciliation at the end of each month.2. has a portfolio of marketable securities that originally cost S19.000. As of December 31, the market value of these securities was $27,500. All short-term investment are classified as “available for sale” During December, $6,400 of accounts receivable were written off a uncollectable. A recent aging of the company's accounts receivable led management to conclude that an allowance for doubtful accounts of $8.500 is needed at December 31, 2018. 4 The company uses a perpetual inventory system. A year end physical count revealed that several guitars reported in the inventory records were missing. The cost of the missing units amounted to $1.350. This amount is not considered significant relative to the total cost of inventory on hand.5. At December 31. approximately $900 in office supplies remained on hand. pay insurance policies 12 months in advance. Its most recent payment was made on November 1. 2018. The cost of this policy was slightly higher than the cost of coverage for the previous 12 months Depreciation expense related to the company's building and fixtures is $5.000 for themonth ending December 31, 2018. not uncommon for experienced musicians to order custom guitars made to their exact specifications. Manufacturers do not allow any sales returns of custom-made guitars. The entire sales amount is collected at the time a custom order is placed and is credited to an account entitled "Unearned Customer Deposits, as a December 31, $4,800 of these deposits remained unfilled because the special-order guitars have not been received from manufacturers. The cost of goods sold and the reduction in inventory associated with all custom orders is recorded when the merchandise is delivered to customers. At that time, the adjusting entry requires only a decrease to unearned customer deposits and an increase in sales. Accrued income taxes payable for the entire year ending December 31, 2018, total Instructions S81,000. No income tax payments are due until early in 2019. Prepare the adjusting entry to account for the depreciation of the company's building and fixtures during December. Prepare the adjusting entry to report the portion of unearned customer deposits that were earned during December. Prepare the adjusting entry to account for income tax expense that accrued during December.
MUSIC-IS-US, INC
TRIAL BALANCE
DECEMBER 31, 2018
cash …………………………………………………. $ 45,000
Marketable securities…………………………. 25,000
Allowance for doubtful accounts………… $5,000
Merchandise inventory……………………….. 250,000
Office supplies................................................... 1,200
Prepaid insurance…………………………………… 6,600
Building and fixtures…………………………… 1,791,000
Land…………………………………………………... 64,800
Accounts payable…………………………………… 70,000
Unearned customer deposits…………………… 8,000
Income taxes payable………………………………. 75,000
Capital stock…………………………………………. 1,000,000
Retained earnings.................................................. 240,200
Unrealized holding gain on investments……… 6,000
sales…………………………………………………. 1,600,000
Cost of goods sold…………………………………. 958,000
Bank service charges……………………………… 200
Uncollectible accounts expense………………….. 9,000
Salary and wages expense……………………….. 395,000
Office supplies expense…………………………… 400
Insurance expense………………………………… 6,400
Utilities expense……………………………………. 3,600
Depreciation expense……………………………… 48,000
Income tax expense…………………………… 75,000
$3,804,200 $3,804,200
Other information
The most recent bank statement reports a balance of $46.975. Included with the bank statement was a $2,500 check from Iggy Smarts, a professional musician, charged back to Music-Is-Us as NSF.
The bank's monthly service charge was $25. Three checks written by Music-Is-Us to suppliers of merchandise has no yet cleared the bank for payment as of the statement date. These cheques included: no. 508 $5,500; no. 511, $7,500: and no. 521, $8,000. Deposits of $16,500 reached the bank too late for inclusion in the current bank statement. The company prepare a bank reconciliation at the end of each month.
2. has a portfolio of marketable securities that originally cost S19.000. As of December 31, the market value of these securities was $27,500. All short-term investment are classified as “available for sale”
During December, $6,400 of accounts receivable were written off a uncollectable. A recent aging of the company'saccounts receivable led management to conclude that an allowance for doubtful accounts of $8.500 is needed at December 31, 2018.
4 The company uses a perpetual inventory system. A year end physical count revealed that several guitars reported in the inventory records were missing. The cost of the missing units amounted to $1.350. This amount is not considered significant relative to the total cost of inventory on hand.
5. At December 31. approximately $900 in office supplies remained on hand.
pay insurance policies 12 months in advance. Its most recent payment was made on November 1. 2018. The cost of this policy was slightly higher than the cost of coverage for the previous 12 months
Depreciation expense related to the company's building and fixtures is $5.000 for the
month ending December 31, 2018.
not uncommon for experienced musicians to order custom guitars made to their exact specifications. Manufacturers do not allow any sales returns of custom-made guitars. The entire sales amount is collected at the time a custom order is placed and is credited to an account entitled "Unearned Customer Deposits, as a December 31, $4,800 of these deposits remained unfilled because the special-order guitars have not been received from manufacturers. The cost of goods sold and the reduction in inventory associated with all custom orders is recorded when the merchandise is delivered to customers. At that time, theadjusting entry requires only a decrease to unearned customer deposits and an increase in sales.
Accrued income taxes payable for the entire year ending December 31, 2018, total Instructions S81,000. No income tax payments are due until early in 2019.- Prepare the adjusting entry to account for the depreciation of the company's building and fixtures during December.
Prepare the adjusting entry to report the portion of unearned customer deposits that were earned during December.
Prepare the adjusting entry to account for income tax expense that accrued during December.
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