AP3-1 (Juni posting preparing statement of Woumalizia, posting, preparing statemente income and statement of financial position, and preparing closing entries) Perfect Pizza had the following count balances December 31, 2019 Cash 533,000 Vies 80,000 Accounts Receivable 15,000 Accumulated Depreciation Vehicles 36,000 Inventory 10,000 Accounts Payable 7.000 Prepad Rest 3,000 Wages Payable 2,000 Equipment 60,000 Common Shares 110,000 Accumulated Depreciation Equipement 30,000 Retained Earnings 16,000 During 2020, the following transactions occurred: 1. Purchases of ingredients and supplies inventory) were $230,000, all on account. 2. Sales of pizzas for cash were $510,000, and sales of pizzas on account were $40,000 3. The company paid $105,000 for wages. 4. The company also paid $25,000 for utilities expenses 5. Payments for ingredients and supplies purchased on account totalled 5220,000 6. Collections from customers for sales on account totalled $38,000 7. Ingredients and supplies valued at $225,000 were used in making pizzas that were sold. 8. A dividend of $15,000 was declared and paid at the end of the year. Information for adjusting entries: 9. At the end of 2020, the amount of rent paid in advance was $1,500. 10. Wages owed to employees at the end of 2020 were $2,500. 11. The equipment had an estimated useful life of eight years, with no residual value. 12. The delivery vehicles had an estimated useful life of six years with a residual value of $8,000. Required a. Prepare journal entries for transactions 1 through 8. Create new accounts as necessary. b. Prepare adjusting journal entries for adjustments 9 to 12. c. Set up T accounts, enter the beginning balances from 2019. post the 2020 entries, and calculate the balance in each account d. Prepare a trial balance, and ensure that the total of the debit balances is equal to the total of the credit balances e. Prepare a statement of income for 2020. 1 Prepare the closing entries, post them to the T accounts, and calculate the final balance in each account 2. Prepare a statement of financial position for 2020. AP3-9A (Preparing adjusting entries) The trial balance for Cozy Fireplaces Inc. for December 31, 2020, follows: Debit balances Credit balances Cash $ 89,000 Accounts receivable 38,000 Inventory 95,000 Supplies 5,000 Prepaid rent 46,000 Land 80,000 Building 150,000 Accumulated depreciation, building $ 19,500 Accounts payable 21,400 Wages payable Interest payable Income tax payable Unearned revenue 12,400 Bank loan payable 40,000 Common shares 150,000 Retained earnings 16,700 Sales revenue 840,000 Cost of goods sold 482,000 Wages expense 95,000 Rent expense Supplies expense Depreciation expense Interest expense Miscellaneous expense 14,000 Income tax expense Dividends declared 6,000 Totals $1,100,000 $1,100,000
