1,000 Alberto, Inc. December 31, 2017 Unadjusted Trial balance Cash 42,000 Accounts Receivable 24,000 Allowance for Doubtful Accounts Short Term Note Receivable 50,000 Interest Receivable 0 Supplies 5,000 Prepaid Insurance 48,000 Inventory 12,000 Vehicle 16,000 Equipment 75,000 Accumulated Depreciation Accounts Payable Uneamed Revenue Wages Payable Long-Term Notes Payable Common Stock Retained Earnings (1/1/2017) Dividends 2,000 Sales Sales Returns & Allowances 7,000 Sales Discounts 3,000 Cost of Goods Sold 46,000 Delivery Expense 5,000 Depreciation Expense 16,000 Bad Debt Expense 0 Rent Expense 98,000 Insurance Expense 25,000 Wages Expense 195,000 Supplies Expense 16,000 Interest Revenue Loss on Disposal 0 Interest Expense 6,500 Income Tax Expense 36,000 Total 727,500 42,000 12,000 14,000 2,000 45,000 106,000 2,500 503,000 0 727,500 Part 1a: Prepare adjusting journal entries using the unadjusted trial balance on the previous page and the information provided below. Use only the account names provided on the previous page (do not create any new account names). I' 1. On Dec 31, 2017 merchandise was sold on account for $16,500 with a cost of $5,500 terms 3/10 net 30. 2. The company received a 6 month, 12% interest note short-term note for the amount listed on the unadjusted trial balance on Oct. 1, 2017. All interest and principal will be paid back at the end of the 6 months. Write the adjusting journal entry required for its financial statements as of Dec. 31, 2017 3. Uncollectable Accounts Receivables of $1,600 need to be written off for the year ended 2017 4. Management estimates that of the remaining accounts receivable balance, $2,000 will be uncollectible. Record the adjustment based on this information. Hint: Use the AFDA balance AFTER the above write off during 2017. Use an AFDA T-account! 5. A piece of equipment was retired on Dec 31, 2017. The equipment originally cost $34.000 and has related A/D of S24,000 as of Jan 1, 2017. Additional depreciation of $3.000 needs to be recorded on this piece of equipment at Dec 31, 2017. Update the depreciation below (#5). Then record the retirement (16) 6. Record the retirement of the equipment (from N5) including the gain or loss. Part 1b: Post the adjusting journal entries to t-accounts: (Specific instructions: Above each T-account, write the account name of each account affected by a journal entry. Write in the unadjusted balance for each of these accounts (from page 1...the unadjusted balance might be a debit, a credit, or zero balance. Now you are ready to post your journal entries from page 2 onto the corresponding T-accounts and then calculate adjusted balances.) -F Part 1c: Prepare the Adjusted Trial Balance (i.e., use ending balances after the previous journal entries are posted) December 31, 2017 Adjusted Trial balance I Debit Credit Cash Accounts Receivable Allowance for Doubtful Accounts Short Term Note Receivable Interest Receivable Supplies Prepaid Insurance Inventory Vehicle Equipment Accumulated Depreciation Accounts Payable Unearned Revenue Wages Payable Long-Term Notes Payable Common Stock Retained Earnings (1/1/2017) Dividends Sales Sales Returns & Allowances Sales Discounts Cost of Goods Sold Delivery Expense Depreciation Expense Bad Debt Expense Rent Expense Insurance Expense Wages Expense Supplies Expense Interest Revenue Loss on Disposal Interest Expense Income Tax Expense Total IE Greg, Inc. December 31, 2017 Adjusted Trial balance Debit Credit Cash 39,000 Accounts Receivable 38,900 Allowance for Doubtful Accounts 2,000 Short Term Note Receivable 50,000 Interest Receivable 1,350 Supplies 5,000 Prepaid Insurance 46,000 Inventory 6,500 Vehicle 16,000 Equipment 43,000 Accumulated Depreciation 21,000 Accounts Payable 8,000 Unearned Revenue 14,000 Wages Payable 2,000 Long-Term Notes Payable 40,000 Common Stock 102,000 Retained Earnings (1/1/2017) 2,500 Dividends 2,000 Sales 519,500 Sales Returns & Allowances 4,000 Sales Discounts 3,000 Cost of Goods Sold 49,500 Delivery Expense 5,000 Depreciation Expense 19,000 Bad Debt Expense 2,600 Rent Expense 96,000 Insurance Expense 25,000 Wages Expense 195,000 Supplies Expense 16,000 Interest Revenue 1,350 Loss on Disposal 7,000 Interest Expense 8,500 Income Tax Expense 34,000 Total 712,350 712,350 Part 2a: Prepare a Multi-step Income Statement (Be sure to include all the necessary headings, totals and subtotals as outlined in Chapter 5. You may not need to use all the lines provided. Note: The two columns below do not represent debit and credit balances like they do on a trial balance. On the Income Statement, use the right column for subtotals and totals.) , Inc. Income Statement Year Ended Dec. 31, 2017 Part 2b: Prepare a statement of Retained Earnings. Inc. Statement of Retained Earnings Year Ended Dec 31, 2017 I Part 2c: Prepare a Classified Balance Sheet (Be sure to include all the necessary subtotals and totals as outlined in Chapter 2. You may not need to use all of the lines provided. Note: The two columns below do not represent debit and credit balances like they do on a trial balance. On the Balance Sheet, use the right column for subtotals and totals.) Inc. Balance Sheet As of Dec. 31, 2017