The following 2007 information is available concerning the Drake

The following 2007 information is available concerning the Drake Company, which adjusts and closes its accounts every December 31:

1. Salaries accrued but unpaid total $2,840 on December 31, 2007.

2. The $247 December utility bill arrived on December 31, 2007 and has not been paid or recorded.

3. Buildings with a cost of $78,000, 25-year life, and $9,000 residual value are to be depreciated; equipment with a cost of $44,000, eight-year life, and $2,000 residual value is also to be depreciated. The straight-line method is to be used.

4. A count of supplies indicates that the Store Supplies account should be reduced by $128 and the Office Supplies account reduced by $397 for supplies used during the year.

5. The company holds a $6,000, 12% (annual rate), six-month note receivable dated September 30, 2007 from a customer. The interest is to be collected on the maturity date.

6. Bad debts expense is estimated to be 1% of annual sales. 2007 sales total $65,000.

7. An analysis of the company insurance policies indicates that the Prepaid Insurance account is to be reduced for the $528 of expired insurance.

8. A review of travel expense reports indicates that $310 advanced to sales personnel (and recorded as Travel Expenses) has not yet been used by these personnel.

9. The income tax rate is 30% on current income and will be paid in the first quarter of 2008. The pretax income of the company before adjustments is $18,270.


Required

Journalize the necessary adjusting entries for the company at the end of 2007. Show supporting calculations in your journal entry explanations.


Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...

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