I-04.01 Problem

I-04.01 Problem - A physical count of supplies on hand...

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I-04.01 Berry Corporation prepared the following preliminary trial balance. The trial balance and other information was evaluated by Delton Wiser, CPA. Delton has returned a list of proposed adjustments that are necessary to facilitate preparation of correct financial statements for the year ending December 31, 20X3. BERRY CORPORATION Trial Balance December 31, 20X3 Debits Credits Cash 30,540 $ $ - Accounts Receivable 45,000 - Supplies 7,000 - Equipment 244,500 - Accumulated Depreciation - 46,500 Accounts Payable - 12,700 Unearned Revenue - 31,250 Notes Payable - 80,000 Capital Stock - 100,000 Retained Earnings, Jan. 1 - 63,200 Dividends 12,000 - Revenues - 289,800 Wages Expense 214,600 - Utilities Expense 8,700 - Selling Expense 41,610 - Depreciation Expense 12,000 - Interest Expense 7,500 - 623,450 $ 623,450 $ 1 of 2
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I-04.01 Delton discovered that 40% of the unearned revenue appearing in the trial balance had actually been earned as of the end of the year.
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Unformatted text preview: A physical count of supplies on hand revealed a year-end balance of only $3,000. Unpaid and unrecorded invoices for utilities for December amounted to $1,500. The last payday was December 26. Employees are owed an additional $3,900 that has not been recorded. Additional depreciation of $3,100 needs to be recorded. (a) Prepare journal entries relating to the adjustments. (b) Prepare an adjusted trial balance (you might utilize a partial worksheet for this task, as shown in the downloadable form). (c) Prepare an income statement and statement of retained earnings for 20X3, and a classified balance sheet as of the end of the year. (d) Berry's bookkeeper argued with Delton that there was no need to record the adjustments since they have no "net" effect on income. Evaluate whether this observation is true of false, and comment on the appropriateness of this logic. 2 of 2...
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This note was uploaded on 02/29/2012 for the course ACCOUNTING 101 taught by Professor Hudack during the Spring '11 term at FIU.

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I-04.01 Problem - A physical count of supplies on hand...

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