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The unadjusted trial balance of Pepe’s Pizza for fiscal 2012, includes the following items:
Debit
Credit
Inventory
$47,800
Wages payable
$ 800
Prepaid insurance
3,800
Taxes payable
0
Your analysis reveals additional information as follows:
The cost of inventory items on hand is $23,200.
Employee wages for the two weeks prior to year end were $7,800 and these will not be paid until the 2013 fiscal year (no other wages are owed).
The unexpired portion of the company’s insurance policy at year end was $4,600.
The company’s tax accountant reports that the company will owe $54,000 for income taxes for fiscal 2012.
Prepare journal entries for any required accounting adjustments.
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