The trial balance of People’s Choice Wholesale Company contained the following accounts shown at December 31, the end of the company’s fiscal year

Adjustment data: 

1.Depreciation is $16,400 on buildings and $14,350 on equipment. (Both are operating expenses.) 

2.Interest of $9,225 is due and unpaid on notes payable at December 31. 

3.Income tax due and unpaid at December 31 is $49,200. Other data: $30,750 of the notes payable are payable next year.

Instructions

(a) Journalize the adjusting entries.

(b) Create T-accounts for all accounts used in part (a). Enter the trial balance amounts into the T-accounts and post the adjusting entries.

(c) Prepare an adjusted trial balance. 

(d) Prepare a multiple-step income statement and a retained earnings statement for the year, and a classified balance sheet at December 31, 2017.

 

PEOPLE'S CHOICE WHOLESALE COMPANY Trial Balance December 31, 2017 Debit $ 31,400 Credit Cash Accounts Receivable 37,600 70,000 Inventory Land 92,000 200,000 Buildings Accumulated Depreciation-Buildings Equipment Accumulated Depreciation-Equipment Notes Payable Accounts Payable $ 60,000 83,500 40,500 54,700 17,500 Common Stock 160,000 67,200 Retained Earnings Dividends 10,000 Sales Revenue 922,100 Sales Discounts 6,000 709,900 51,300 11,400 8,900 5,200 4,800 Cost of Goods Sold Salaries and Wages Expense Utilities Expense Maintenance and Repairs Expense Advertising Expense Insurance Expense $1,322,000 $1,322,000