The unadjusted trial balance of LeBrun Company at its year end, July 31, 2024, is as follows: 

Adjustment information: 

1. The July 31 bank statement reported debit memos for service charges of $50 and a $650 NSF (not sufficient funds) cheque that had been received from a customer for the purchase of merchandise in July. 

2. Estimated uncollectible accounts receivable at July 31 are $3,850. 

3. The note receivable bears interest of 8% and was issued on December 31, 2023. Interest is payable the first of each month. 

4. A physical count of inventory determined that $39,200 of inventory was actually on hand. 

5. Prepaid expenses of $5,500 expired in the year (use the account Operating Expenses). 

6. Depreciation is calculated on the long-lived assets using the following methods and useful lives: 

Building: straight-line, 25 years, $15,000 residual value 

Equipment: double diminishing-balance, five years, $2,500 residual value 

Patent: straight-line, five years, no residual value.

7. The 6% note payable was issued on August 1, 2016. Interest is paid monthly at the beginning of each month for the previous month’s interest. Of the note principal, $1,680 is currently due. 

8. Estimated warranty costs for July are $1,975 (use Operating Expenses). 

Instructions 

a. Prepare the adjusting journal entries required at July 31. (Round your calculations to the nearest dollar.) 

b. Prepare an adjusted trial balance at July 31. 

c. Prepare a multiple-step income statement and statement of owner’s equity for the year and a balance sheet at July 31.

Transcribed Image Text:

Cash Petty cash Accounts receivable Allowance for doubtful accounts Note receivable (due December 31, 2024) Merchandise inventory Prepaid expenses Land LEBRUN COMPANY Trial Balance July 31, 2024 Building Accumulated depreciation-building Equipment Accumulated depreciation equipment Patent Accumulated amortization-patent Accounts payable Warranty liability Notes payable (due August 1, 2033) S. LeBrun, capital S. LeBrun, drawings Sales Cost of goods sold Operating expenses Interest revenue Interest expense Totals $ Debit 16,550 200 38,500 10,000 45,900 16,000 50,000 155,000 25,000 75,000 54,000 450,000 181,220 6,830 $1,124,200 Credit $ 2,000 10,800 12,200 15,000 78,900 6,000 124,200 124,700 750,000 400 $1,124,200