Question

The unadjusted trial balance for Mitchell Pharmacy appears below.
The following information is available at year-end for adjustments:
a. An analysis of insurance policies indicates that $2,180 of the prepaid insurance is coverage for 2012.
b. Depreciation expense for 2011 is $10,130.
c. Four months’ interest at 10 percent is owed but unrecorded and unpaid on the note payable.
d. Wages of $4,950 are owed but unpaid and unrecorded at December 31.
e. Income taxes of $11,370 are owed but unrecorded and unpaid at December 31.
Required:
1. Prepare the adjusting entries.
2. Prepare an income statement, a retained earnings statement, and a balance sheet using adjusted account balances.
3. Why would you not want to prepare financial statements until after the adjusting entries are made?


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  • CreatedSeptember 22, 2015
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