ACC 301 Financial Reporting I Spring 2018 Accounting Cycle Practice Set Attached is the unadjusted trial balance for Surfs Up, Inc. Instructions: 1. Construct T-accounts and enter the balances shown. 2. The following adjusting entries have been identified: a. Bad debt expense is estimated to be $8,000. b. Annual depreciation expense on the Equipment is $16,000 and annual depreciation expense for building is $9,000. c. Prepaid Insurance is for 2 years of insurance paid on 1/1/17. Record the amount for 2017. d. The note payable ($270,000) has interest of 6% per year and the interest is payable on 1/1/18. Record the interest for 2017. e. Salaries and wages earned but unpaid as of year-end are $10,750 (sales) and $4,950 (administrative). f. At year-end, $1,660 of Supplies remain on hand. g. $10,000 of the unearned rent revenue was earned as of 12/31/17. h. Utilities expense incurred for December, but unpaid and unrecorded was $4,000. i. Assume no income tax expense and do not calculate earnings per share. Prepare the adjusting journal entries (include explanations) and post the entries to the appropriate T-accounts (construct additional T-accounts as necessary). 3. Prepare an adjusted trial balance. 4. Prepare a classified balance sheet and a multiple-step income statement in good form. 5. Prepare closing journal entries and post to the T-accounts. 6. Prepare a post-closing trial balance. You should use Excel or a similar spreadsheet program to prepare your work. (you T- accounts can be prepared by hand and postings can be by hand) Your grade will be based on both the accuracy and the organization of your work product. Please submit a hard copy of your work or upload all pieces on blackboard under the assignment. (Submit adjusting journal entries, adjusted trial balance, classified balance sheet, multistep income statement, closing journal entries, post closing trial balance and your final T-accounts after posting closing entries) Surfs Up, Inc.
Trial Balance
			31-Dec-17
					Debit		Credit
Cash					$45,760
Accounts Receivable					$83,350
Allowance for Doubtful Accounts							$4,000
Supplies					$7,110
Inventory					$315,240
Prepaid Insurance					$14,000
Equipment					$422,000
Accumulated Depreciation - Equipment							$118,000
Building					$500,000
Accumulated Depreciation - Building							$15,000
Land					$100,000
Notes Payable							$270,000
Accounts Payable							$89,500
Unearned Rent Revenue							$18,000
Common Stock							$110,000
Retained Earnings							$265,000
Sales Revenue							$2,100,000
Rent Revenue							$64,000
Cost of Goods Sold					$937,440
Salaries and Wages Expense - sales					$273,500
Advertising Expense-Sales					$78,100
Utilities Expense-Administrative					$49,000
Telecommunications -Administrative					$32,000
Salaries and Wages Expense - administrative					$196,000
					$3,053,500		$3,053,500	$ 0