The unadjusted trial balance for ABC Inc is provided below. Use it in conjunction with the notes
Question:
The unadjusted trial balance for ABC Inc is provided below.
Use it in conjunction with the notes provided below to prepare a multi-step income statement, equity statement, and classified balance sheet. Prepare journal entries to show the accounting treatment for each of the adjustments below .
abc inc | ||
Unadjusted Trial Balance | ||
For the year ended December 31, 2015 |
Debit | Credit | |
Money | 300.000 | |
accounts receivable | 400.000 | |
Inventory | 200,000 | |
prepaid insurance | 100,000 | |
Equipment | 2,000,000 | |
Accumulated Depreciation—Equipment | 800.000 | |
Tierra | 500,000 | |
Notes payable (long term) | 200,000 | |
Accounts payable | 300.000 | |
Unearned service income | 150.000 | |
owner's equity | 600.000 | |
Retained earnings | 400.000 | |
sales revenue | 3,000,000 | |
cost of goods sold | 1,500,000 | |
selling expenses | 300.000 | |
Administration expenses | 200,000 | |
Interest income | 150.000 | |
Loss on sale of fixed assets | 100,000 | |
5,600,000 | 5,600,000 |
The following settings were provided
1. Fees of $50,000 received in advance during the year were erroneously recorded in Sales revenue.
2. Earned $100,000 recorded as unearned service during the year
3. Prepaid insurance expired during the year $50,000. (Administration expenses)
4. The equipment is expected to last 6 years. Salvage value is $200,000 (CoGS)
5. Office salaries and salaries earned but not recorded and not paid as of December 31, 2015, $50,000. (Administration expenses)
6. A physical inventory count on 12/31/2015 shows $50,000 remaining. (CoGS)
7. Provide a $50,000 Bad Debt Allowance (Sale)
8. Provide income taxes of 20% of income before taxes
9. Dividends of 100,000 were declared (but not paid) for the year.
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen