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Electric, Inc maintains it accounts on the basis of a fiscal year ending October 31. The following unadjusted Trial Raining,. was prepared 1 / innn the general ledger ad October J I, 1999. Reversing entries had been made by Electric, Inc in November 1, 1998 the first day of the current fiscal year for the accrued interest payable and the accrued salaries and wages payable which had been recorded by adjusting entries on October 31, 1998.
De it Credit Cash 52,000 Account Receivable 32,000 Inventory, Oct 31, 198 47,000 Land 84,000 Building 210,000 Accum. Deprec.:Building 84,000 Equipment 252,000 Accum. Deprec: Equip 62,700 Account payable 45,000 Accrued interest payable 0 Accrued salaries/wages pay 0 Bond payable, 9% 100,000 Capital Stock 200,000 Retain Earning, Nov 1, 1998 88,800 Dividends 8,000 Sales 820,000 Purchases 490,000 Salaries & Wages Expense 56,500 Selling Expense 122,500 General Expense 41,000 Interest Expense 5,500 0 TOTAL 1,400,500 1,400.500
1. After a careful analyses of Account Receivable a decision is made to establish an Allowance for Doubtful Account in the amount of $2,200.
2. Estimated economic life of the building is 40 years; residual value is zero. Estimated economic life of equipment is 20 years with residual value of $12,000. 3. Interest on the bond is payable Jan. 1 and July 1. 4. Salaries and wages earned but repaid on Oct 31 amount to $5,000. 5. The inventory at Oct, 31, 1999 cost $26,000. 6. The income tax expense is estimated to be 40% of income before income taxes WORM a 12 column work sheet to adjust accounts and classify the balances as to income talkifelign, Retain timing arid Ialancc Siwet till Jude a pail of column for an adjusted trail..
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