Toronado Ltd. reported the following items in its unadjusted trial balance as of 31 December 20X4 for the 20X4 fiscal year. This trial balance is listed in alphabetical order. Note that this is a partial trial balance and does not include all accounts. Accounts have normal (debit or credit) balances.

Administration expense	$	235,600
Accounts payable		76,700
Accounts receivable		99,700
Allowance for doubtful accounts (credit)		1,900
Cash dividends declared		30,900
Freight-out (delivery to customers)		26,800
Gain on sale of automobile		1,300
Insurance expense		38,160
Interest expense		27,000
Loans receivable, 8%		74,900
Merchandise inventory, 1 January		89,300
Notes payable, 6%		499,800
Purchases		560,300
Salaries and employee benefits		121,400
Sales returns and allowances		42,600
Sales revenues		1,898,700
Selling expense		34,600
Supplies expense		46,400
Supplies inventory		500
Retained earnings, 1 January		568,200
Unearned revenue		31,900
Utilities expense		65,300

Other information:

• The tax rate is 30%, but no tax has yet been recorded.
• Closing merchandise inventory is $76,400. Closing supplies inventory is $1,200.
• The insurance expense represents a payment made on 1 May for a 24-month fire insurance policy.
• Customers owe $52,900 for goods delivered on 31 December; this amount has not yet been recorded.
• All sales are on account, except those that are prepaid.
• Unearned revenue represents all customer deposits received during the year. Of this amount, 60% is still unearned at the end of the year.
• Bad debt expense is to be recognized as 1% of total sales.
• Interest on the note payable was last paid and recorded on 31 October.
• The company owes $3,100 in utilities.
• Interest on the loan receivable has not been paid or recorded all year.

Required:
Prepare journal entries to reflect the required adjustments.

Answer rating: 100% (QA)

66 31Oct Unearned Revenue 3190040 12760 67 Sales Revenue 12760 68 To record revenue earned 6... View the full answer