The December 31 trial balance of Red Roses Boutique Inc. follows:
(a) Create T accounts and enter the balances shown.
(b) Prepare adjusting entries for the following and post to the T accounts. Open additional T accounts as necessary.
(The books are closed yearly on December 31.)
1. Bad debts are estimated to be S3,800 (the percentage of sales method is used).
2. Equipment is depreciated based on a 10-year life and no residual value.
3. Insurance expired during the year is $2,100.
4. Interest accrued on notes payable is $6,420.
5. Sales salaries and wages earned but not paid are $8,000.
6. Advertising paid in advance is $750.
7. Office supplies on hand total $3,500 and were charged to Office Expense when they were purchased.
(c) Prepare closing entries and post to the accounts.

  • CreatedSeptember 18, 2015
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