Among the account balances shown in the trial balance of Dunwoody Mail Station, Inc., at December 31 of the current year are the following:
|
Debits |
Credits |
|
|
Supplies on hand |
$10,000 |
|
|
Prepaid insurance |
6,000 |
|
|
Buildings |
168,000 |
|
|
Accumulated depreciation and buildings |
$39,000 |
The inventory of supplies on hand at December 31 amounts to USD 3,000.
The balance in the Prepaid Insurance account is for a two-year policy taken out June 1 of the current year.
Depreciation for the buildings is based on the cost shown in the Buildings account, less residual value estimated at USD18,000. When acquired, the lives of the buildings were estimated at 50 years each.
a. Prepare the year-end adjusting journal entries at December 31.
b. Open ledger accounts for each of the accounts involved, enter the balances as shown in the trial balance, post the adjusting journal entries, and calculate year-end balances.