Home / Questions / The unadjusted trial balance for ABC Inc is provided below. Use along with the notes prov...
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.
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ABC Inc |
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Unadjusted Trial Balance |
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For the year ended 31st Dec 2015 |
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Debit |
Credit |
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Cash |
300,000 |
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Accounts Receivable |
400,000 |
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Inventory |
200,000 |
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Prepaid Insurance |
100,000 |
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Equipment |
2,000,000 |
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Accumulated DepreciationâEquipment |
800,000 |
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Land |
500,000 |
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Notes Payable (Long term) |
200,000 |
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Accounts payable |
300,000 |
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Unearned Service Revenue |
150,000 |
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Owner's Capital |
600,000 |
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Retained earnings |
400,000 |
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Sales Revenue |
3,000,000 |
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Cost of Goods Sold |
1,500,000 |
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Selling Expenses |
300,000 |
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Admin Expenses |
200,000 |
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Interest revenues |
150,000 |
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Loss on sale of fixed assets |
100,000 |
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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.
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