401K Payable

-

Accounts payable

215,000.00

Accounts receivable

150,000.00

Accumulated depreciation - buildings

338,000.00

Accumulated depreciation - equipment

14,550.00

Accumulated depreciation - furniture

17,950.00

Advertising expense

-

Allowance for doubtful accounts

21,500.00

Bad debt expense

-

Buildings

1,500,000.00

Cash

30,925.00

Common stock

500,000.00

Cost of goods sold

405,000.00

Depreciation expense - building

-

Depreciation expense - equipment

-

Depreciation expense - furniture

-

Dividends

25,000.00

Equipment

20,000.00

Federal income tax payable

-

Furniture

55,000.00

Gain on the sale of old furniture

5,000.00

Income tax expense

50,000.00

Income tax payable

50,000.00

Interest expense

-

Interest payable

-

Interest receivable

-

Interest revenue

-

Inventories

418,500.00

Land

647,700.00

Long-term notes payable

1,250,000.00

Notes Receivable

46,875.00

Other operating expenses

50,000.00

Payroll tax expense

-

Payroll tax payable - employee

-

Payroll tax payable - employer

-

Prepaid advertising

24,000.00

Rent expense

130,000.00

Retained earnings (beginning of year)

300,000.00

Salaries expense

168,000.00

Salaries payable

-

Sales

1,075,000.00

Short-term investments

100,000.00

Short-term notes payable

AdjustingJournalEntries:

1ARecorddepreciationexpenseonbuilding

1BRecorddepreciationexpenseonfurniture

1CRecorddepreciationexpenseonequipment

.2Recordinventoryadjustments

.3ARecordaccruedsalaries

SalariesExpense

PayrollTaxPayable-Employee

FederalIncome TaxPayable

401KPayable

SalariesPayable

3BRecordaccruedpayrolltaxes

PayrollTaxExpense

PayrollTaxPayable-Employer

4Recordaccruedinterestonnotesreceivable

5Recordinterestonlong-termnotespayable.Interestonlyispaidannuallyat6%rateonJuly1eachyear.

6Recordsuppliesused.SuppliesonhandDecember31is$500.

7Recordexpiredadvertising.Prepaidadvertisingof$24,000wasfor3years.Oneyear'scosthasexpired.

8Recordbaddebtsexpense.Of$150,000ofAccountsReceivable,$25,000isnotexpectedtobecollectedsoadjustthebalanceintheAllowanceforbaddebtsto$25,000.

9UnearnedrevenueonDecember31is$4,000.Recordearnedportionofunearnedrevenue.

Createaworksheethere.Postyouradjustmentsandcomputetheadjustedbalances.

Prepareanincomestatement,statementofretainedearnings,andabalancesheet.