Interest is payable twice a year on each august 31

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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 $1,000.1.Complete the worksheet below.2-a.Use the information in the worksheet to prepare an income statement for 2018.2-b.Use the information in the worksheet to prepare a statement of shareholders’ equity for 2018.2-c.Use the information in the worksheet to prepare a balance sheet as of December 31, 2018.
3.Prepare the necessary closing entries assuming that adjusting entries have been correctly posted to the accounts.Complete the worksheet below.Account TitleUnadjustedTrial BalanceAdjusting EntriesAdjusted TrialBalanceIncome StatementBalance SheDr.Cr.Dr.Cr.Dr.Cr.Dr.Cr.Dr.CrCash$23,300$23,300$23,300Accounts receivable32,50032,50032,500Supplies500500500Prepaid rent1,0001,0001,000Inventory65,00065,00065,000Office equipment75,00075,00075,000Accumulated depreciation—office equipment$10,0009,37519,375Accounts payable26,10026,100Salaries and wages payable3,0001,5004,500Note payable30,00030,000Interest payable01,0001,000Common stock80,00080,000Retained earnings16,05016,050Sales revenue180,000180,000180,000Cost of goods sold95,00095,00095,000Interest expense1,0001,0001,000Salaries and wages expense32,3501,50033,85033,850Rent expense14,0001,00013,00013,000Supplies expense2,0005001,5001,500Utility expense6,0006,0006,000Depreciation expense9,3759,3759,375$159,725$180,000$197,300Net income20,275Totals$345,150$345,150$13,375$13,375$357,025$357,025$180,000$180,000$197,300

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