prepare closing entries and post to the accounts 324612
Aug 29, 2021 | Uncategorized
| P3.10. |
(adjusting and Closing)
Presented below is the December 31 trial balance of New York Boutique.
| NEW YORK BOUTIQUE |
| TrialBalance |
| December31 |
|
Debit |
Credit |
| Cash |
$ 18,500 |
|
| Accounts Receivable |
32,000 |
|
| Allowance for Doubtful Accounts |
|
$ ?700 |
| Inventory, December 31 |
80,000 |
|
| Prepaid Insurance |
5,100 |
|
| Equipment |
84,000 |
|
| Accumulated Depreciation—Equipment |
|
35,000 |
| Notes Payable |
|
28,000 |
| Common Stock |
|
80,600 |
| Retained Earnings |
|
10,000 |
| Sales Revenue |
|
600,000 |
| Cost of Goods Sold |
408,000 |
|
| Salaries and Wages Expense (sales) |
50,000 |
|
| Advertising Expense |
6,700 |
|
| Salaries and Wages Expense (administrative) |
65,000 |
|
| Supplies Expense |
5,000 |
|
|
$754,300 |
$754,300 |
|
|
Instructions
| (a) |
Construct T accounts and enter the balances shown. |
| (b) |
Prepare adjusting journal entries for the following and post to the T accounts. (Omit explanations.) Open additional T accounts as necessary. (The books are closed yearly on December 31.)
 |
|
| 1. |
Bad debt expense is estimated to be $1,400. |
| 2. |
Equipment is depreciated based on a 7 year life (no salvage value). |
| 3. |
Insurance expired during the year $2,550. |
| 4. |
Interest accrued on notes payable $3,360. |
| 5. |
Sales salaries and wages earned but not paid $2,400. |
| 6. |
Advertising paid in advance $700. |
| 7. |
Office supplies on hand $1,500, charged to Supplies Expense when purchased. |
|
|
|
| (c) |
Prepare closing entries and post to the accounts. |
|
