Prepare: Adjusting entries Adjusted trial balance income statement Balance Sheet
ID: 2378254 • Letter: P
Question
Prepare:
Adjusting entries
Adjusted trial balance
income statement
Balance Sheet
EXCALIBUR CORPORATION Unadjusted Trial Balance December 31, 2009 Account Title Debits Credits Cash 23,300 Accounts receivable 32,500 Allowance for uncollectible accounts 100 Supplies 0 Prepaid rent 0 Inventory 65,000 Equipment 75,000 Accumulated depreciation - equipment 10,000 Accounts payable 26,000 Wages payable 3,000 Note payable 30,000 Common stock 80,000 Retained earnings 16,050 Sales revenue 180,000 Cost of goods sold 95,000 Interest expense 0 Wage expenses 32,350 Rent expense 14,000 Supplies expense 2,000 Utility expense 6,000 Bad debt expense 0 Totals 345,150 345,150 Additional. information: Accrued wages, year-end $4,500 Percentage of A/R uncollectible 2% Cash borrowed, 9/1 $30,000 Principal due in 10 years Annual interest rate 10% Supplies on hand at year-end $500 Prepaid rent, year-end $1,000 Dividends paid $6,000
Explanation / Answer
Adjusting Entries: 1.) Wages Accrual Wages Expense 4500 Wages Payable 4500 2.) Bad Debt Entry Bad Debt Expense 650 Allowance for Uncoll. Accts. 650 3.) Interest Accrual ($30,000 x 10% x 4/12) Interest Expense $1,000 Interest Payable $1,000 4.) Purchase of Supplies Supplies 500 Accounts Payable 500 5.) Purchase of Prepaid Rent Prepaid Rent 1000 Cash 1000 6.) Dividend payment Retained Earnings 6000 Cash 6000 Adjusted Trial Balance: Account Title Debits Credits Cash 16,300 Accounts receivable 32,500 Allowance for uncollectible accounts 750 Supplies 500 Prepaid rent 1000 Inventory 65,000 Equipment 75,000 Accumulated depreciation - equipment 10,000 Accounts payable 26,500 Wages payable 7,500 Note payable 30,000 Interest payable 1,000 Common stock 80,000 Retained earnings 10,050 Sales revenue 180,000 Cost of goods sold 95,000 Interest expense 1000 Wage expenses 36,850 Rent expense 14,000 Supplies expense 2,000 Utility expense 6,000 Bad debt expense 650 Totals 345,800 345,800 Income Statement: Sales revenue 180,000 Cost of goods sold 95,000 Interest expense 1000 Wage expenses 36,850 Rent expense 14,000 Supplies expense 2,000 Utility expense 6,000 Bad debt expense 650 Net Income 24,500 Balance Sheet: Cash 16,300 Accounts receivable 32,500 Allowance for uncollectible accounts 750 Supplies 500 Prepaid rent 1000 Inventory 65,000 Equipment 75,000 Accumulated depreciation - equipment 10,000 Total Assets 179,550 Accounts payable 26,500 Wages payable 7,500 Note payable 30,000 Interest payable 1,000 Total Liabilties 65,000 Common stock 80,000 Retained earnings 34,550 Total Equity 114,550 Total Liabilties & Equity 179,550