The following selected account balances(pre-adjusted)are taken from the ledger b
ID: 2364413 • Letter: T
Question
The following selected account balances(pre-adjusted)are taken from the ledger book of ABC company at Decmber 31,2012: Cash $2000 accounts receivable $13000 Allowance for uncollectible accounts $3200(credit balance) Inventory Dec 31 2012 $22000 Long-term investments $30000 Buildings(at cost) $45000 Accumulated depreciation for buildings $26000(credit balance) Other assets $12800 Accounts payable $8000 Taxes payable $4400 Loans payable $15000 Capital stock $40000 Retained Earnings,Dec 31 2012 $28000 Retained Earnings,Jan 1,2012 $??? Dividends,2012 $??? Sales revenues $98000 Cost of goods sold $42000 Selling expense $6000 Wages and salary expense $12500 Uncollectible accounts expense $400 Miscellaneous general and administrative expenses $11000 Office supplies expense $5400 Insurance expense $4800 Interest revenue $800 Interest expense $2200 Additional information(to be used for adjusting entries) a the allowance for uncollectible accounts should be increased to $3800 baccrued wages and salary(not paid)at the end of 2012 were $450 c buildings are depreciated at the rate of 4%(of cost)per year(depreciation is recognized at the end of each year) d accrued selling expense(not paid)at the end of 2012 was $600 e prepaid(unexpired)insurance premium at the end of the year was $420(when insurance premiums are paid,the company charges them to the insurance expense account) f accrued interest on loans, not paid at the end of 2012 was $188 g earned interest on long-term investment,not received as of the end of 2012,was $1000 h office supplies unused as of the end of 2012 were $350(when office supplies are purchased, the company charges the amount of the supplies to the office supplies expenses account) Required: 1 prepare the necessary adjusting entries for each of the additional information items above 2 compute the adjusted balance of each balance sheet account in the adjusting entries above.Notice that allowance for uncollectibles and accumulated depreciation are reported on the balance sheet. 3 compute the pre-tax income of the company for 2012(after considering the adjusting entries above)Explanation / Answer
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