The following unadjusted trial balance is for Ace Co. as at the end of 2015 financial year. The credit balance of the owner's capital account on June 30, 2014 was $57,500, and the owner invested $23,000 cash in the company during the 2015 financial year.
a. The supplies available at the end of financial year 2015 had a cost of $2,880.
b. The cost of expired insurance for the financial year is $3,780.
c. Annual depreciation on equipment is $8,400.
d. The June utilities expense of $560 is not included in the unadjusted trial balance because the bill arrived after the trial balance was prepared. The $560 amount owed needs to be recorded.
e.The company's employees have earned $1,500 of accrued wages at financial year-end.
f. The rent expense incurred and not yet paid or recorded at financial year- end is $300.
g. Additional property tax of $1,000 have been assessed for this financial year but have not been paid or recorded in the accounts.
h. The long-term note payable bears interest at 12% per year. The unadjusted Interest Expense account equals the amount paid for the first 11 months of the 2015 financial year. The $230 accrued interest for June has not yet been paid or recorded. (The company is required to make a $5,000 payment toward the note payable during the 2016 financial year.)
(a) Evaluate the principles of accounting and the recording of financial transactions and events. Prepare adjusting journal entries to record the transactions of a through h.
(b) Prepare the income statement, the statement of changes in equity for the year ended June 30, and the classified statement of financial position at June 30, 2015. Be sure to list the assets and liabilities in order of their liquidity. Amounts to be deducted should be indicated by a minus sign.
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