The accounts of Strait Alleys, showing the end of its annual accounting period balances, appear in the
Question:
The accounts of Strait Alleys, showing the end of its annual accounting period balances, appear in the booklet of working papers that accompanies this text, and a trial balance of the accounts is reproduced on a work sheet form provided there. The trial balance has the items that follow.
\title{
Required }
1. Enter the unadjusted trial balance on a work sheet form and complete the work sheet using the information that follows.
a. Bowling supplies inventory, \(\$ 270\).
b. Expired insurance, \(\$ 1,795\).
c. Estimated depreciation on the bowling equipment, \(\$ 7,075\).
d. A \(\$ 245\) bill for equipment repairs arrived in the mail after the trial balance was prepared. It is unrecorded and unpaid.
\(e\). Wages earned but unpaid and unrecorded, \(\$ 335\).
. The lease contract on the bowling alley space calls for an annual rental equal to \(11 \%\) of the annual bowling revenue, with \(\$ 600\) payable each month on the first day of the month. The \(\$ 600\) was paid each month and debited to the Rent Expense account.
g. Personal property taxes on the bowling equipment amounting to \(\$ 325\) have accrued but are unrecorded and unpaid.
h. The long-term note payable was signed on August 1. The interest on the debt is at a \(12 \%\) annual rate or \(\$ 150\) per month. The note requires the payment in advance of \(\$ 450\) interest each three months. Interest was paid on August 1 and November 1. A \(\$ 3,000\) payment on the note principal is due next August 1 .
2. Prepare an income statement, a statement of changes in owner's equity, and a classified balance sheet. Mr. Strait did not make any additional investments in the business during 1990 .
3. Journalize adjusting and closing entries.
4. Post the adjusting and closing entries and prepare a post-closing trial balance. (Omit this requirement if the working papers are not being used.)
Step by Step Answer:
