Adjusting Entries

An aging of accounts receivable revealed that 3% of accounts receivable are uncollectible.

Depreciation Expense: Straight Line Depreciation is used.

You will need to think about this carefully

(a) For equipment purchased PRIOR to 2021, the equipment has a $15,000 salvage value and a useful life of 9 years.

(b) For equipment purchased DURING 2021, the equipment has an $9,000 salvage value and a 9-year useful life.

Pre-paid rent needs to be adjusted. Assume the beginning balance of pre-paid rent represented rent from January 1 to September 1.

Salaries accrued but not yet paid are $8,000.

Accrue the interest on the note payable that was given for the purchase of equipment.

Utilities owed but not yet paid are $1,600.

Supplies on hand are $425.

The income tax rate is 30% of income before taxes (note - you will need to calculate income before taxes before you can make this last adjusting entry!).

Question: Make these adjusting entries above and make an adjusted trial balance

Here are the original entries that were made:

You can use the above information to make the adjusting entries. Please make sure to use the correct numbers from the 8 adjusting entries to make the journal entries (ex: 3% for the first one). I asked this question before and they used the wrong numbers and I got incorrect answers, please help!

General Journal General Journal Page 1 Credit Page 2 Credit PR PR Description Date 1 Description Inventory Accounts Payable Debit 180,000 Debit 9000 Date 10 Prepaid Rent Cash X 9000 180,000 45000 11 Equipment Date - Transaction Number PR - Post Reference, since we don't have an account number, Just put in an x when you post to the General Ledger so that you don't Inadvertently post something twice - or not at all 2 Cash Sales Revenue IX 45000 Notes Payable X 375001 1800 37500 12 Maintenance and Repair Expense Cash 1800 ix 12500 Cost of Goods Sold Inventory 75000 Ix 12500 13 Cash Common Stock APIC Common Stock 25000 50000 X X 437500 3 Accounts Receivable Sales Revenue X 437500 75000 14 Cash Preferred Stock 75000 107500 Cost of Goods Sold Inventory 107500 2600 15 Utilities Expense Cash 2600 6000 4 Sales Returns and Allowances Accounts Receivable 6000 6000 16 Dividends Cash 1500 6000 Inventory Cost of Goods Sold 1500 4000 17 Dividends Cash 4000 5 Cash Sales Discount Accounts Receivable 416500 8500 1500 18 Allowance for Doubtful Accounts Accounts Receivable 1500 425000 1400 6 Supplies Accounts Payable 1400 19 Cash Accumulated Depreciation - Equipment Loss - Other Equipment 18000 25000 2000 45000 150000 7 Accounts Payable Cash 150000 8 Notes Payable Interest Expense Interest Payable Cash 30000 1200 6001 31800 9 Salaries Expense Salaries Payable Cash 36700 37500 37500 Credit Our Favorite Store Trial Balance 31-Dec-21 Account Title Debit Cash 465,500 Accounts Receivable 37,000 Allowance for Doubtful Accounts 100 Inventory 111,500 Supplies 6,000 Prepaid Rent 24,000 Equipment 240,000 Accumulated Depreciation - Equipment Accounts Payable Income Taxes Payable Notes Payable Common Stock $2 Par Value Additional Paid In Capitol - Common Preferred Stock $25 Par Value Retained Earnings Dividends 10000 Sales Revenue Sales Discounts 8,500 Sales Returns and Allowances 6000 Gains Cost of Goods Sold 118,500 Interest Expense 1,200 Maintenance and Repair Expense 1,800 Salary Expense 36,700 Utilities Expense 2,600 Losses - Other 2,000 1,071,400 25,000 73,400 4,000 45,000 155,000 135,000 100,000 59000 475000 1,071,400 General Journal General Journal Page 1 Credit Page 2 Credit PR PR Description Date 1 Description Inventory Accounts Payable Debit 180,000 Debit 9000 Date 10 Prepaid Rent Cash X 9000 180,000 45000 11 Equipment Date - Transaction Number PR - Post Reference, since we don't have an account number, Just put in an x when you post to the General Ledger so that you don't Inadvertently post something twice - or not at all 2 Cash Sales Revenue IX 45000 Notes Payable X 375001 1800 37500 12 Maintenance and Repair Expense Cash 1800 ix 12500 Cost of Goods Sold Inventory 75000 Ix 12500 13 Cash Common Stock APIC Common Stock 25000 50000 X X 437500 3 Accounts Receivable Sales Revenue X 437500 75000 14 Cash Preferred Stock 75000 107500 Cost of Goods Sold Inventory 107500 2600 15 Utilities Expense Cash 2600 6000 4 Sales Returns and Allowances Accounts Receivable 6000 6000 16 Dividends Cash 1500 6000 Inventory Cost of Goods Sold 1500 4000 17 Dividends Cash 4000 5 Cash Sales Discount Accounts Receivable 416500 8500 1500 18 Allowance for Doubtful Accounts Accounts Receivable 1500 425000 1400 6 Supplies Accounts Payable 1400 19 Cash Accumulated Depreciation - Equipment Loss - Other Equipment 18000 25000 2000 45000 150000 7 Accounts Payable Cash 150000 8 Notes Payable Interest Expense Interest Payable Cash 30000 1200 6001 31800 9 Salaries Expense Salaries Payable Cash 36700 37500 37500 Credit Our Favorite Store Trial Balance 31-Dec-21 Account Title Debit Cash 465,500 Accounts Receivable 37,000 Allowance for Doubtful Accounts 100 Inventory 111,500 Supplies 6,000 Prepaid Rent 24,000 Equipment 240,000 Accumulated Depreciation - Equipment Accounts Payable Income Taxes Payable Notes Payable Common Stock $2 Par Value Additional Paid In Capitol - Common Preferred Stock $25 Par Value Retained Earnings Dividends 10000 Sales Revenue Sales Discounts 8,500 Sales Returns and Allowances 6000 Gains Cost of Goods Sold 118,500 Interest Expense 1,200 Maintenance and Repair Expense 1,800 Salary Expense 36,700 Utilities Expense 2,600 Losses - Other 2,000 1,071,400 25,000 73,400 4,000 45,000 155,000 135,000 100,000 59000 475000 1,071,400