Hy Sharp owns the Sharp Knife Shop. His bookkeeper has completed a trial balance (given here)....

 

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Hy Sharp owns the Sharp Knife Shop. His bookkeeper has completed a trial balance (given here). There are a few other transactions to enter before his year end financial statements can be produced. Update his accounting system with the entries required, produce his income statement and balance sheet, and provide his current ratio, debt ratio, and his profit margin, plus his working capital ratio. Trial Balance Cash DR $12,600 Accounts Receivable DR $16,900 Inventory DR $14,100 Prepaid Expenses - Rent DR $9,600 Prepaid Expenses - Insurance DR $7,400 Equipment DR $42,900 Accounts Payable CR $1,100 Loan Note Payable CR $1,200 Mortgage Note Payable CR $24,500 Equity CR 17,200 Draw from Equity DR 16,200 Revenue CR 104,500 Salaries Expense DR 26,500 Utility Expense DR 1,950 Pending Transactions: $2,100 of the prepaid insurance is now consumed Payment made on the mortgage note of $2,400 Inventory count at year end shows $5,900 worth on hand Salaries earned but not yet paid are $1,950 Depreciation expense on the equipment is $7,100 Rent consumed against the prepaid amount is $3,200 Hy Sharp owns the Sharp Knife Shop. His bookkeeper has completed a trial balance (given here). There are a few other transactions to enter before his year end financial statements can be produced. Update his accounting system with the entries required, produce his income statement and balance sheet, and provide his current ratio, debt ratio, and his profit margin, plus his working capital ratio. Trial Balance Cash DR $12,600 Accounts Receivable DR $16,900 Inventory DR $14,100 Prepaid Expenses - Rent DR $9,600 Prepaid Expenses - Insurance DR $7,400 Equipment DR $42,900 Accounts Payable CR $1,100 Loan Note Payable CR $1,200 Mortgage Note Payable CR $24,500 Equity CR 17,200 Draw from Equity DR 16,200 Revenue CR 104,500 Salaries Expense DR 26,500 Utility Expense DR 1,950 Pending Transactions: $2,100 of the prepaid insurance is now consumed Payment made on the mortgage note of $2,400 Inventory count at year end shows $5,900 worth on hand Salaries earned but not yet paid are $1,950 Depreciation expense on the equipment is $7,100 Rent consumed against the prepaid amount is $3,200

Answer rating: 100% (QA)

1 Adjusting entries Debit Credit 1 Insurance expense 2100 Prepaid expenses insurance 2100 2 Mortgage ... View the full answer