36. Presented below is the December 30 trial balance of Cassini Studios. 72 points

Cassini Studios Trial Balance December 30, 2016
	Debit	Credit
Cash .........................................	$ 14,800
Accounts Receivable ..........................	33,600
Allowances for Doubtful Accounts .............		$ 2,160
Finished Goods Inventory, January 1 ......... Office Supplies ? Prepaid Advertising	62,400
Furniture and Equipment ......................	67,200
Accumulated Depreciation--Furniture and Equipment ..................................		26,880
Prepaid Insurance ............................	4,080
Notes Payable 12% interest rate............. Interest Payable ? Wages Payable ?		22,400
Paul Jones, Capital 12/29...................		72,000
Sales ........................................		480,000
Cost of Goods Sold............................	320,000
Sales Salaries Expense .......................	40,000
Advertising Expense ..........................	5,360
Administrative Salaries Expense ............. Insurance Expense ? Interest Expense ? Doubtful Account Expense ? Depreciation Expense ? Income Tax Expense ?	52,000
Office Supplies Expense ...........	4,000
	$603,440	$603,440

(1)	Prepare adjusting journal entries for the following items:
	(a)	Adjust the Allowance for Doubtful Accounts to 8 percent of the 12/31 Accounts Receivable. Remember there is a $2,160 credit balance in the Allowance account.
	(b)	Furniture and equipment is depreciated at 20 percent per year.
	(c)	Insurance expired during the year, $2,040.
	(d)	12% interest for one year has been accrued on notes payable, ($22,400 * 12%).
	(e)	Salaries earned for the last two days in December, but not paid, $1,920.
	(f)	Advertising has been paid in advance, $560 on Dec. 29, 2016.
	(g)	Office supplies on hand on 12/31, $1,200, charged to Office Expense when purchased. (h) Ending Inventory on December 31 was $64,000 so you have to debit it, credit the Beginning Finished Goods Inventory and the difference will be reflected into CGS. The company found an invoice from John Smith for $1,000 sale on account that had not been recorded on Dec. 29th in the above balances. (j) The Income Tax Expense is 10% of the net income before income tax. This will be the Income Summary balance after all the revenues and expenses have been closed out.
(2)	Prepare closing entries for Cassini after the above adjusting entries have been made. Additional information shows the. You can summarize the revenues and expenses and close them directly to Income Summary and then close Income Summary into the Paul Jones Capital account.

(3) Prepare a post-closing trial balance for Cassini on December 31, 2016.

Cassini Studios Trial Balance December 31, 2016
	Debit	Credit
Cash .........................................
Accounts Receivable ..........................
Allowance for Doubtful Accounts .............
Finished Goods Inventory, December 31.........
Furniture and Equipment ......................
Accumulated Depreciation--Furniture and Equipment ..................................
Prepaid Insurance ............................ Prepaid Advertising Office Supplies
Notes Payable ..................... Wages Payable Interest Payable Other
Paul Jones, Capital on 12/31.................
	$ 0	$ 0