Some selected balances of DD Co. for the year ended Dec-31-2019 are as follows with their normal
Question:
Some selected balances of DD Co. for the year ended Dec-31-2019 are as follows with their normal balances before adjustments:
Cash and Cash Equivalent Br 20,000
Owners’ Capital 40,000
Notes Receivables 45,000
Retained Earnings 75,000
Office Supplies 12,000
Sales Revenues 640,000
Prepaid Insurance 72,000
Interest Income 12,000
Inventory (Average Cost) 24,000
Cost of Goods Sold 320,000
Fixed Assets 120,000
Selling Expenses 21,000
Accum. Depr- Fixed assets 36,000
Salary and Wages Expense 105,000
Unearned Rent (Liability) 56,000
Rent Expense 15,000
Required
a. Prepare the necessary adjusting entries for the following items as not yet recorded onDec-31-2019:
i. The office supplies consumed during the year is Br 8,000
ii. The Unexpired part of insurance is only Br 26,000
iii. Br 30,000 is earned sales revenues from the unearned advance collection
iv. Salary and wages accrued as on 31-Dec-2019 amounts to be Br 18,000
v. Depreciation Expenses allocated for the year amounts to be Br 15,000
vi. There are accrued interest of Br 8,000 on the notes receivable
b. Prepare the following Financial Statements after adjustments on Dec-31- 2019.
i. Balance Sheet ii. Income Statement
c. Prepare closing journal entries after balances are adjusted and show the final closing of Income Summary to Retained Earnings
Expert Answer:
Adjustment Entries Adjusting Journal Entry Date Particulars Debit Br Credit Br 1 Office Suppliers Expenses 8000 To Office Supplies 8000 Being office suppliers expenses consumed 2 Insurance Expenses 72... View the full answer
