Question 1
The following unadjusted trial balance was taken from the booksof Declanâs Musical Equipment and Instruction Store, Inc. onDecember 31, 2015.
Cash $ 14,000
AccountsReceivable 38,000
Allowance for DoubtfulAccounts $ 1,800
NoteReceivable 7,000
MerchandiseInventory 54,000
PrepaidInsurance 4,800
Furniture andEquipment 100,000
Accumulated Depreciation of F. &E. 20,000
AccountsPayable 9,200
DeferredRevenue 2,000
CommonStock 44,000
RetainedEarnings 45,000
Dividends 400
Sales 200,000
ServiceRevenue 100,000
Cost of GoodsSold 131,000
SalariesExpense 60,000
RentExpense 12,800
Totals $422,000 $422,000
Additional information as of 12/31/15 is as follows:
a. A four year $4,800 insurance policy was purchasedon July 1, 2015.
b. Declan had sales of$3,200 during the last week of December for which he has notreceived cash payment from customers. He has not yet recorded thesesales and must bill the customers.
c. The useful life of Furniture & Equipment is10 years with no salvage value.
d. Interest at 8% isreceivable on the note for one full year.
e. Employees were paidtheir bi-weekly payroll on Friday, December 25th forwork performed through that date. The next payroll date will beJanuary 8th. Employees are paid $2,600 per day, Mondaythru Friday.
f. A customer paid$2,000 in advance for group instructional services to be performedin December 2015 and January 2016. Declan recorded this amount as aliability upon receipt.
REQUIRED:
A. Prepare the required adjusting entries for the year endingDecember 31, 2015.
B. Prepare the required closing entries for the year endingDecember 31, 2015.
Question 1
The following unadjusted trial balance was taken from the booksof Declanâs Musical Equipment and Instruction Store, Inc. onDecember 31, 2015.
Cash $ 14,000
AccountsReceivable 38,000
Allowance for DoubtfulAccounts $ 1,800
NoteReceivable 7,000
MerchandiseInventory 54,000
PrepaidInsurance 4,800
Furniture andEquipment 100,000
Accumulated Depreciation of F. &E. 20,000
AccountsPayable 9,200
DeferredRevenue 2,000
CommonStock 44,000
RetainedEarnings 45,000
Dividends 400
Sales 200,000
ServiceRevenue 100,000
Cost of GoodsSold 131,000
SalariesExpense 60,000
RentExpense 12,800
Totals $422,000 $422,000
Additional information as of 12/31/15 is as follows:
a. A four year $4,800 insurance policy was purchasedon July 1, 2015.
b. Declan had sales of$3,200 during the last week of December for which he has notreceived cash payment from customers. He has not yet recorded thesesales and must bill the customers.
c. The useful life of Furniture & Equipment is10 years with no salvage value.
d. Interest at 8% isreceivable on the note for one full year.
e. Employees were paidtheir bi-weekly payroll on Friday, December 25th forwork performed through that date. The next payroll date will beJanuary 8th. Employees are paid $2,600 per day, Mondaythru Friday.
f. A customer paid$2,000 in advance for group instructional services to be performedin December 2015 and January 2016. Declan recorded this amount as aliability upon receipt.
REQUIRED:
A. Prepare the required adjusting entries for the year endingDecember 31, 2015.
B. Prepare the required closing entries for the year endingDecember 31, 2015.
