Prepare adjusting journal entries for salem trading company

Assignment Help Accounting Basics

Reference no: EM131972230

Problem

Salem trading company unadjusted trial balance Dec 31, 2016

	Debit	Credit
Cash	$25,500
Accounts Receivable	40,000
Allowance for Doubtful Accounts		700
Inventory, Dec 31	80,000
Prepaid Insurance	5,100
Prepaid Supplies	5,000
Equipment	84,000
Accumulated Depretiation - Equipment		35,000
Notes Payable		35,000
Common Stock		80,600
Retained Earnings		10,000
Sales Revenue		608,000
Cost Of Good Sold	408,000
Salaries and Wages Expense (sales)	50,000
Advertising Expense	6,700
Salaries and Wages Expense (administrative)	65,000

1. Bad debt expense is estimated to be $1680
2. Equipment is depreciated based on a 7-year life (no salvage value)
3. nshurance expired during the year $2975
4. Interest accrued on notes payable $2360
5. Sales salaries and wages earned but not paid $3000
6. Office supplies on hand $2000

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 bookes are closed yearly on December 31.)

c) Prepare an adjusted trial balance

d) Prepare an income statement for 2016 and a balance sheet as of December 31, 2016

e) Prepare and post closing entries

f) Prepare a post-closing trial balance.

Reference no: EM131972230

Questions Cloud

Find the cost of a strangle using the options with strikes : Find the cost of a straddle using options with a strike price of 30. Draw the profit diagram and show the profit for the ending stock price in the appropriate.

What is the importance of taxes in our economy : Describe the items included in computing gross income and adjusted gross income. What is the importance of taxes in our economy?

Computing gross income and adjusted gross income : Describe the items included in computing gross income and adjusted gross income. What is the importance of taxes in our economy?

Calculate the accounting break-even level of sales in dollar : What if the price of the machine turns out to be $120,000 instead of $100,000 (assume straight line depreciation)? What happens to net present value?

Prepare adjusting journal entries for salem trading company : Salem trading company unadjusted trial balance Dec 31, 2016. Prepare adjusting journal entries for the following and post to the T-accounts.

Switches to the levered capital structure : The pretax cost of debt is 8.6%. Ignoring taxes, what will the cost of equity be if the firm switches to the levered capital structure?

What is one share of this stock worth today : The company plans to double each annual dividend payment for the next three years. After that time, it plans to pay a constant $2.25 per share indefinitely.

Shoe box stores adopts the new capital structure : What should Jamie do if she prefers the all-equity structure but Shoe Box Stores adopts the new capital structure?

Estimate the equity cost of capital for mackenzie : Under the CGDM, at what rate do you need to expect Mackenzie's dividends to grow to get the same equity cost of capital as in part (a)?

User Account

All Pages