The trial balance of Mesa Wholesale Company contained the accounts shown at December 31, the end of the company's fiscal year:

Adjustment data:
1. Depreciation is \(\$ 10,000\) on buildings and \(\$ 9,000\) on equipment. (Both are administrative expenses.)
2. Interest of \(\$ 7,000\) is due and unpaid on notes payable at December 31 .
Other data: \(\$ 15,000\) of the notes payable are payable next year.
\section*{Instructions}

(a) Journalize the adjusting entries.

(b) Create \(\mathrm{T}\) accounts for all accounts used in part (a). Enter the trial balance into the \(\mathrm{T}\) accounts and post the adjusting entries.

(c) Prepare an adjusted trial balance.

(d) Prepare a multiple-step income statement and a retained earnings statement for the year, and a classified balance sheet at December 31, 1998.

Transcribed Image Text:

MESA WHOLESALE COMPANY Trial Balance December 31, 1998 Debit Credit Cash $ 33,400 Accounts Receivable 37,600 Merchandise Inventory 90,000 Land 92,000 Buildings 197,000 Accumulated Depreciation-Buildings 54,000 Equipment 83,500 Accumulated Depreciation-Equipment 42,400 Notes Payable 50,000 Accounts Payable 37,500 Common Stock 200,000 Retained Earnings 67,800 Dividends 10,000 Sales 902,100 Sales Discounts 4,600 Cost of Goods Sold 709,900 Salaries Expense 69,800 Utilities Expense 9,400 Repair Expense 5,900 Gas and Oil Expense 7,200 Insurance Expense 3,500 $1,353,800 $1,353,800