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The unadjusted trial balance for ABC Inc is provided below. Use along with the notes provided below to prepare a multi-step income statement, statement of stockholders equity and a classified balance

The unadjusted trial balance for ABC Inc is provided below.

Use along with the notes provided below to prepare a multi-step income statement, statement of stockholders equity and a classified balance sheet. Prepare journal entries to show the accounting treatment for each of the adjustments below.

ABC Inc

   

Unadjusted Trial Balance

   

For the year ended 31st Dec 2015

   
 

Debit

Credit

Cash

300,000

 

Accounts Receivable

400,000

 

Inventory

200,000

 

Prepaid Insurance

100,000

 

Equipment

2,000,000

 

Accumulated Depreciation—Equipment

 

800,000

Land

500,000

 

Notes Payable (Long term)

 

200,000

Accounts payable

 

300,000

Unearned Service Revenue

 

150,000

Owner's Capital

 

600,000

Retained earnings

 

400,000

Sales Revenue

 

3,000,000

Cost of Goods Sold

1,500,000

 

Selling Expenses

300,000

 

Admin Expenses

200,000

 

Interest revenues

 

150,000

Loss on sale of fixed assets

100,000

 
     
 

5,600,000

5,600,000

The following adjustments were provided

1. Fees of $50,000, received in advance during the year were erroneously recorded in Sales revenue.

2. $100,000 recorded as unearned service was earned during the year

3. Prepaid Insurance expired during the year $50,000. (Admin Expense)

4. Equipment is expected to last for 6 years. Salvage value is $200,000 (CoGS)

5. Office salaries and wages earned but unrecorded and unpaid December 31, 2015, $50,000. (Admin Expense)

6. A physical count of inventory on 12/31/2015 shows that $50,000 worth is remaining. (CoGS)

7. Provide a bad debt allowance of $ 50,000 (Selling)

8. Provide income taxes of 20% of income before taxes

9. Dividends of 100,000 was declared (but not paid) for the year.

 

Jul 21 2021 View more View Less

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