Prepare adjusted trial balance. On 31 December 20X5, the Hearth & Stove Corp. is preparing financial statements.

Prepare adjusted trial balance.

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On 31 December 20X5, the Hearth & Stove Corp. is preparing financial statements. The following unadjusted trial balance has been prepared: Accounts payable Accounts receivable Advertising expense Accumulated depreciation-office equipment Allowance for doubtful accounts Cash Cost of goods sold Common shares Dividends declared Insurance expense Interest expense Interest revenue Inventory Land Long-term investments Mortgage payable Notes payable-short term Office equipment Office expense Prepaid insurance Retained earnings, opening Revenue received in advance. Sales Supplies inventory Supplies expense Miscellaneous expense Rent expense Wages expense HEARTH & STOVE CORP. Trial Balance $ Debit 316,635 19,200 25,200 990,000 15,600 2,700 3,960 75,000 217,500 468,900 108,000 19,650 0 600 6,300 23,145 108,000 216,900 $2,617,290 $ Credit 66,450 59,700 6,750 67,500 1,260 445,500 16,200 68,730 52,200 1,833,000 $2,617,290 Page A-49 The following facts are also available at the end of 20X5: a. The inventory on hand is $70,050 according to the physical count. b. The allowance for doubtful accounts should have a balance of $8,400. c. The office equipment is depreciated at a rate of 8% per year (straight-line). d. There are supplies of $1,800 on hand. e. On 31 March of this year, the company bought a $2,700 insurance policy with a 12-month term. f. Customers have not yet been billed for products delivered on the last day of the year. The products have a retail value of $81,000. The cost of goods sold for this transaction was properly recorded. g. Income tax is estimated to be 30% of all earnings before income tax. No income tax has been recorded or paid. On 31 December 20X5, the Hearth & Stove Corp. is preparing financial statements. The following unadjusted trial balance has been prepared: Accounts payable Accounts receivable Advertising expense Accumulated depreciation-office equipment Allowance for doubtful accounts Cash Cost of goods sold Common shares Dividends declared Insurance expense Interest expense Interest revenue Inventory Land Long-term investments Mortgage payable Notes payable-short term Office equipment Office expense Prepaid insurance Retained earnings, opening Revenue received in advance. Sales Supplies inventory Supplies expense Miscellaneous expense Rent expense Wages expense HEARTH & STOVE CORP. Trial Balance $ Debit 316,635 19,200 25,200 990,000 15,600 2,700 3,960 75,000 217,500 468,900 108,000 19,650 0 600 6,300 23,145 108,000 216,900 $2,617,290 $ Credit 66,450 59,700 6,750 67,500 1,260 445,500 16,200 68,730 52,200 1,833,000 $2,617,290 Page A-49 The following facts are also available at the end of 20X5: a. The inventory on hand is $70,050 according to the physical count. b. The allowance for doubtful accounts should have a balance of $8,400. c. The office equipment is depreciated at a rate of 8% per year (straight-line). d. There are supplies of $1,800 on hand. e. On 31 March of this year, the company bought a $2,700 insurance policy with a 12-month term. f. Customers have not yet been billed for products delivered on the last day of the year. The products have a retail value of $81,000. The cost of goods sold for this transaction was properly recorded. g. Income tax is estimated to be 30% of all earnings before income tax. No income tax has been recorded or paid.

Answer rating: 100% (QA)

Based on the information provided the following adjustments need to be made 1Adjustment for inventor... View the full answer