The Murphy Company prepared a trial balance on the following partially completed worksheet for the year ended
Question:
The Murphy Company prepared a trial balance on the following partially completed worksheet for the year ended December 31, 2007:
Additional information:
(a) The equipment is being depreciated on a straight-line basis over a 10-year life, with no residual value;
(b) Salaries accrued but not recorded total $500;
(c) On January 1, 2007 the company had paid three years' rent in advance at $100 per month;
(d) Bad debts are expected to be 1% of total sales;
(e) Interest of $400 has accrued on the note payable; and
(f) The income tax rate is 40% on current income and will be paid in the first quarter of 2008.
Required
1. Complete the worksheet.
2. Prepare financial statements for 2007.
3. Prepare closing entries in the generaljournal.
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones