new york boutique financial statements 500556
Aug 29, 2021 | Uncategorized
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P3.10.
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(adjusting and Closing)
Presented below is the December 31 trial balance of New York Boutique.
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NEW YORK BOUTIQUE
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TrialBalance
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December31
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Debit
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Credit
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Cash
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18,500$
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Accounts Receivable
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32,000
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Allowance for Doubtful Accounts
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700$
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Inventory, December 31
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80,000
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Prepaid Insurance
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5,100
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Equipment
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84,000
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Accumulated Depreciation Equipment
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35,000
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Notes Payable
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28,000
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Common Stock
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80,600
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Retained Earnings
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10,000
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Sales Revenue
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600,000
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Cost of Goods Sold
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408,000
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Salaries and Wages Expense (sales)
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50,000
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Advertising Expense
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6,700
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Salaries and Wages Expense (administrative)
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65,000
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Supplies Expense
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5,000
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$754,300
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$754,300
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Instructions
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(a)
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Construct T-accounts and enter the balances shown.
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(b)
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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.)
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1.
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Bad debt expense is estimated to be $1,400.
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2.
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Equipment is depreciated based on a 7-year life (no salvage value).
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3.
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Insurance expired during the year $2,550.
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4.
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Interest accrued on notes payable $3,360.
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5.
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Sales salaries and wages earned but not paid $2,400.
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6.
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Advertising paid in advance $700.
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7.
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Office supplies on hand $1,500, charged to Supplies Expense when purchased.
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(c)
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Prepare closing entries and post to the accounts.
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