The following trial balance and additional data are for Best-Friend Pet Hospital, Inc.:

The company consistently followed the policy of initially debiting all prepaid items to asset accounts 1. Prepaid fire insurance is \(\$ 600\) as of the end of the year.
Additional data 2. Supplies on hand are \(\$ 638\) as of the end of the year.
3. Prepaid rent is \(\$ 2,625\) as of the end of the year.
4. The equipment is expected to last 10 years with no salvage value.
5. Accrued salaries are \(\$ 2,625\).

a. Prepare a 12-column work sheet for the year ended December 31, 1999. You need not Required include account numbers. Briefly explain the entries in the Adjustments columns at the bottom of the work sheet, as was done in Illustration 4.2.

b. Prepare the December 31, 1999, closing entries.

Transcribed Image Text:

Cash. Accounts Receivable Supplies on Hand.. Prepaid Fire Insurance. Prepaid Rent Equipment BEST-FRIEND PET HOSPITAL, INC. Trial Balance December 31, 1999 Accumulated Depreciation-Equipment Accounts Payable Notes Payable Capital Stock Debits Credits $ 16,490 54,390 900 1,800 21,600 125,000 $ 25,000 29,550 9,000 150,000 Retained Earnings, January 1, 1999. 20,685 Service Revenue 179,010 Interest Expense 225 Salaries Expense. 142,200 Advertising Expense 29,250 Supplies Expense 2,135 Miscellaneous Expense 3,705 Legal and Accounting Expense 13,750 Utilities Expense. 1,800 $413,245 $413,245