I really need (2) answered please I have know idea how to do the part (2) down b
ID: 2450678 • Letter: I
Question
I really need (2) answered please I have know idea how to do the part (2) down below!!???
Presented below is the December 30 Trial balance of Cassini Studios. Debit Credit Cash................................................. $14,800 Accounts Receivable....................... 33,600 Allownance for Doubtful Accounts........ $2,160 credit Inventory, January 1.............................. 62,400 Furniture and Equipment....................... 67,200 Accumulated Depreciation -- Furniture & Equipment........................................... $26,880 credit Prepaid Insurance................................... $4,080 Notes Payable 12% interest rate............. $22,400 credit Paul Jones, Capital 12/29........................ $72,000 credit Sales ....................................................... $480,000 credit Purchases ............................................... $320,000 Sales Salaries Expense.......................... $40,000 Advertising Expense .............................. $5,360 Administrative Salaries Expense ............. $52,000 Office Expense ........................................ $4,000 (1) Prepare adjusting entries for the following items: (a) Adjust the Allownace for Doubtful Accounts to 8 percent of the accounts receivable. Remember there si a $2160 balance in the Allowance account. (b) Furniture and equipment is depreciated at 20 percent per year. (c) Insurance expired during the year, $2040. (d) 12% interest for one year has been accrued to notes payable, ($22,400*12%). (e) Salaries earne for the last two days in December, but not paid, $1920 (f) January 15, 2014 advertising has been paid in advance, $560. (g) Office supplies on hand, $1200, charged to Office Expense when purchased. (2) Prepare closing entries for Cassini after the above adjusting entries have been made. Additional information shows the inventory on December 31, was $64,000. You can summarize the revenues and expenses and close them directly to Income Summary and then close Income Summary into Paul Jones Capital account. (3) Prepare a post-closing trial balance for Cassini on December 31. Cassini Studios Trial Balance December 31, 2012 Debit Credit Cash.......................................................... Accounts Receivable ............................... Allowances for Doubtful Accounts........... Inventory, December 31......................... Furniture and Equipment........................ Accumulated Depreciation-- Furniture an Equipment Prepaid Insurance............................... Notes Payable......................................... Paul Jones, Capital on 12/31................... Sales ..................................................... Purchases ............................................... Sales Salaries Expense .......................... Advertising Expense ................................ Salaries Payable ..................................... Office Expense ........................................ Interest Payable ........................................ Office Supplies .......................................... Other ......................................................... $________ $_________
Explanation / Answer
Adhusting Journal entries Particulars Dr Amount Cr Amount Allowance for D Fdebts (Exp.) Dr. 528 To Allowance for Doubtful Debts 528 (Additional Provision Created at 8%) Depreciation A/c Dr. 13440 To Accumulated Dep. - Fur. & Equipmants 13440 (depreciation provision is made during the year) Insurance A/c Dr. 2040 To Prepaid Insurance A/c 2040 (Insurance expired during the year) Interest A/c Dr. 2688 To Accrued Interest - Notes payable A/c 2688 (Interest accrued during the year) Salary A/c Dr. 1920 To Salary Payable A/c 1920 (Salary accrued but not paid during the year) Prepaid Advt. A/c Dr. 560 To Advt. A/c 560 (Advt Prepaid in Advanced for next year) Office Supplies A/c Dr. 1200 To Office Expenses A/c 1200 (Office supplies in hand at the end of year) Adjusted Trial Balance Dr Amount Cr Amount Cash 14800 Accounts Receivables 33600 Allowance for doubtful debts 2688 Bad Debts a/c 528 Inventory - jan-1 62400 Furnitures & Equipments 67200 Depreciation 13440 Accumulated Dep - Furnitures & Equipments 40320 Prepaid Insurance 2040 Insurance Exp. 2040 Notes Payable - 12% 22400 Accrued Interest- Notes Payable 2688 Interest A/c 2688 Paul Jones - Capital A/c 72000 Credit Sales 480000 Credit Purchases 320000 Sales Salaries exp. 41920 Sales Salaries Payable exp. 1920 Advt. exp 4800 Prepaid Advt. Exp. 560 Adm. Salaries Exp. 52000 Office Expenses 2800 Office Supplies Inventory 1200 622016 622016 Income Statement Sales 480000 Less: Cost of Goods Sold Purchases 320000 Opening Inventory 62400 Less: Closing Inventory -64000 318400 Gross Profit 161600 Less: Expenses Bad debts 528 Depreciation 13440 Insurance Exp. 2040 Interest A/c 2688 Sales Salaries exp. 41920 Advt. exp 4800 Adm. Salaries Exp. 52000 Office Expenses 2800 120216 Net Profit 41384 Balance Sheet Equity & Liabilities Amount 1. Capital Account Paul Jones - Capital A/c 72000 Add; Net Profit 41384 113384 2. Non Current Liabilities Notes Payable - 12% 22400 3. Current Liabilities Accrued Interest- Notes Payable 2688 Sales Salaries Payable exp. 1920 4608 Total 140392 Assets 1. Non Current Assets Furnitures & Equipments 67200 Less: Accumulated Dep - Furnitures & Equipments 40320 26880 2. Current Assets Accounts Receivables 33600 Allowance for doubtful debts 2688 Net Accounts Receivables 30912 Prepaid Insurance 2040 Prepaid Advt. Exp. 560 Office Supplies Inventory 1200 Inventory 64000 Cash 14800 113512 Total 140392