# Homework Special Problem 1 CH2.pdf - Assignment Print View...

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9/9/2017Assignment Print View1/7Score:100/100Points100%
9/9/2017Assignment Print View2/71.Award: 100 out of 100.00 pointsExcalibur Corporation manufactures and sells video games for personal computers. The unadjusted trialbalance as of December 31, 2013, appears below. December 31 is the company’s fiscal year-end. Thecompany uses the perpetual inventory system.Account TitleDebitsCreditsCash23,300 Accounts receivable32,500 Supplies0 Prepaid rent0 Inventory65,000 Equipment75,000 Accumulated depreciation—equipment10,000 Accounts payable26,100 Wages payable3,000 Note payable30,000 Common stock80,000 Retained earnings16,050 Sales revenue180,000 Cost of goods sold95,000 Interest expense0 Wage expense32,350 Rent expense14,000 Supplies expense2,000 Utility expense6,000 Totals345,150 345,150 Cash dividends paid to shareholders during the year amounted to \$6,000.Information necessary to prepare the year-end adjusting entries appears below.1.The equipment was purchased in 2011 and is being depreciated using the straight-line method over aneight-year useful life with no salvage value.2.Accrued wages at year-end should be \$4,500.3.The company borrowed \$30,000 on September 1, 2013. The principal is due to be repaid in 10 years.Interest is payable twice a year on each August 31 and February 28 at an annual rate of 10%.4.The company debits supplies expense when supplies are purchased. Supplies on hand at year-end cost\$500.5.Prepaid rent at year-end should be \$1,000.Complete the worksheet below.Use the information in the worksheet to prepare an income statement for 2013.
9/9/2017Assignment Print View3/7EXCALIBUR CORPORATIONIncome StatementFor the Year Ended December 31,2013 Sales revenue\$ 180,000Cost of goods sold(95,000)Gross profit (loss)85,000Operating expenses:Wages expense33,850Rent expense13,000Depreciation expense9,375Utility expense6,000Supplies expense1,500Total operating expenses63,725