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intermediate_solution_sectional_exam_1_2010

intermediate_solution_sectional_exam_1_2010 - Sectional...

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Sectional exam 1 Winsor Corporation Work Sheet For the Year Ended December 31, 2007 Trial Balance Adjustments Trial Balance After Adj. Accounts Dr. Cr. Dr. Cr. Dr. Cr. Cash 12,400 12,400 Trading Sec. 4,050 4,050 Accounts Rec. 50,000 50,000 Allow. for D. A. 420 420 Mdse. Inventory 16,800 16,800 Supplies 1,040 (d) 600 440 Equipment 45,000 45,000 Accum. Depr.-Eq. 9,500 (a) 5,500 15,000 Accounts Payable 4,400 4,400 Notes Payable 5,000 5,000 Common Stock 40,000 40,000 Ret. Earnings 34,690 34,690 Cost of Goods Sold 225,520 225,520 Office Salaries Exp. 20,800 20,800 Sales Comm. Exp. 29,000 (b) 3,000 32,000 Rent Expense 7,200 (e) 800 6,400 Misc. Expense 2,200 2,200 Sales 320,000 320,000 Totals 414,010 414,010 Depr. Exp. (a) 5,500 5,500 Sales Com. Pay. (b) 3,000 3,000 Interest Expense (c) 100 100 Interest Payable (c) 100 100 Supplies Expense (d) 600 600 Prepaid Rent (e) 800 800 Totals 10,000 10,000 442,610 422,610
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Adjusting entries and explanations (a) Depreciation Expense .................................................................... 5,500 Accumulated Depreciation—Equipment ............................. 5,500 ($45,000 – $1,000 is $44,000. One-eighth of $44,000 is $5,500.) (b) Sales Commissions ........................................................................ 3,000 Sales Commissions Payable .............................................. 3,000 (10% of sales is 10% × $320,000, which is $32,000. The balance in the Sales Commissions account is $29,000 before adjustment, indicating that $3,000 of commissions are accrued but unpaid.) (c) Interest Expense ............................................................................ 100
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