The Green Thumb Gardener is a retail store that sells plants, soil, and decorative pots. On December 31, 2016, the firm€™s general ledger contained the accounts and balances that appear below.
ACCOUNTS AND BALANCES

INSTRUCTIONS
1. Prepare the Trial Balance section of a 10-column worksheet. The worksheet covers the year ended December 31, 2016.
2. Enter the adjustments below in the Adjustments section of the worksheet. Identify each adjustment with the appropriate letter.
3. Complete the worksheet.

ADJUSTMENTS
a.-b. Merchandise inventory on December 31, 2016, is $13,321.
c. During 2016, the firm had net credit sales of $45,000; the firm estimates that 0.5 percent of these sales will result in uncollectible accounts.
d. On December 31, 2016, an inventory of the supplies showed that items costing $325 were on hand.
e. On October 1, 2016, the firm signed a six-month advertising contract for $1,080 with a local newspaper and paid the full amount in advance.
f. On January 2, 2015, the firm purchased store equipment for $8,700. At that time, the equipment was estimated to have a useful life of five years and a salvage value of $700.
g. On January 2, 2015, the firm purchased office equipment for $2,200. At that time, the equipment was estimated to have a useful life of five years and a salvage value of $300.
h. On December 31, 2016, the firm owed salaries of $1,930 that will not be paid until 2017.
i. On December 31, 2016, the firm owed the employer's social security tax (assume 6.2 percent) and Medicare tax (assume 1.45 percent) on the entire $1,930 of accrued wages.
j. On December 31, 2016, the firm owed federal unemployment tax (assume 0.6 percent) and state unemployment tax (assume 5.4 percent) on the entire $1,930 of accrued wages.

Analyze:
By what amount were the assets of the business affected byadjustments?

Transcribed Image Text:

Cash Accounts Receivable Allowance for Doubtful Accounts Merchandise Inventory Supplies Prepaid Advertising Store Equipment Accumulated Deprediution- Store Equipment Office Equipment Accumulated Depreciation-Office Equipment Accounts Payable Social Security Tax Payable Medicare Tax Payable Federal Unemployment Tax Payable State Unemployment Tax Payable Salaries Payable Beth Argo, Capital Beth Argo, Drawing Sales Sales Returns and Allowances Purchases Purchases Returns and Allowrances Rent Expense Telephone Expense Salories Expense Payroll Taxes Expense Income Summary Supplies Expense Advertising Expense Depreciation Expense Store Equipment Depreciation Expense-Office Equipment Uncollectible Accounts Expense S 6,700 Dr. 3,600 Dr. 62 Cr. 12,300 Dr. 1,300 Dr 1,080 Dr 8,700 Dr. 1,600 Cr. 2,200 Dr. 380 Cr. 2725 Cr. 530 Cr. 88 Cr 30,677 Cr. 21,000 Dr. 95,048 Cr. 1,200 Dr. 49,400 Dr 530 7,000 Dr 690 Dr 15,100 Dr. 1,370 Dr.