ACC310 Intermediate Accounting 1 Fa19 Case 1 Chapter 2

Pastina Company sells various types of pasta to grocery chains as private label brands. The company's fiscal year-end is December 31. The unadjusted trial balance as of December 31, 2018, appears below.

Information necessary to prepare the year-end adjusting entries appears below.

1. Depreciation on the office equipment for the year is $12,000.
2. Employee salaries and wages are paid twice a month, on the 22nd for salaries and wages earned from the 1st through the 15th, and on the 7th of the following month for salaries and wages earned from the 16th through the end of the month. Salaries and wages earned from December 16 through December 31, 2018, were $6,200.
3. On October 1, 2018, Pastina borrowed $90,000 from a bank and signed a note. The note requires interest to be paid annually on September 30 at 4%. The term is 5 years.
4. On April 1, 2018, the company lent a supplier $52,000 and a note was signed requiring principal and interest at 10% to be paid on February 28, 2019.
5. On April 1, 2018, the company paid an insurance company $16,000 for a two-year fire insurance policy. The entire $16,000 was debited to insurance expense.
6. $1,250 of supplies remained on hand at December 31, 2018.
7. A customer paid Pastina $7,500 in December for 1,500 pounds of spaghetti to be delivered in January 2019. Pastina credited sales revenue.
8. On December 1, 2018, $8,400 rent was paid to the owner of the building. The payment represented rent for December 2018 through March 2019 and was debited to prepaid rent.

Required:

1. Set up an Excel file and prepare the Unadjusted Trial Balance in the first worksheet.
2. Prepare the necessary December 31, 2018, adjusting journal entries in the next worksheet. (8 points)
3. Enter the unadjusted balances from the trial balance into a 10 column worksheet, and post the adjusting entries prepared from the above data to the worksheet. Present the correct balances for all columns in the worksheet. (6 points)
4. Prepare an adjusted trial balance, displayed in another worksheet. (2 points)
5. Prepare an income statement and a statement of shareholders' equity for the year ended December 31, 2018, and a classified balance sheet as of December 31, 2018. Assume that no common stock was issued during the year and that $4,500 in cash dividends were paid to shareholders during the year. (8 points)
6. Prepare closing entries. (4 points)
7. Prepare a post-closing trial balance. (2 points)

All of the above required items are to be prepared in one Excel file with separate worksheets for: Unadjusted Trial Balance, Adjusting Journal Entries, Worksheet, Adjusted Trial Balance, Statements, Closing Journal Entries, and Post-closing Trial Balance. You will be graded on the proper use of Excel, including cell linking / referencing, use of formulas for totals, etc.

Credits Debits 23,250 41,350 2650 62 500 52,000 8,400 140,000 45,000 44,800 90,000 Account Title Cash Accounts receivable Supplies Inventory Note receivable Interest receivable Prepaid rent Prepaid insurance Office equipment Accun deproffice equipment Accounts payable Salaries and wages payable Note payable Interest payable Deferred revenue Common stock Retained earnings Dividends declared & paid Sales revenue Interest revenue Cost of goods sold Salaries and wages expense Rent expense Depreciation expense Interest expense Supplies expense Insurance expense Advertising expense 80,000 49,800 6,000 165,800 87,800 19,200 11,000 1,250 16.000 4,000