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AP3-9A (Preparing adjusting entries) The trial balance for Cozv Firenlaces Inc. for December 21.202. follows: Additional information for adjusting entries: 1. The deposits from customers
AP3-9A (Preparing adjusting entries) The trial balance for Cozv Firenlaces Inc. for December 21.202. follows: Additional information for adjusting entries: 1. The deposits from customers were for future deliveries. As at December 31 , three-quarters of these goods had been delivered. 2. There is $2,000 in wages owed at year end. 3. Rent is paid in advance on the last day of each month. There was a balance of $3,000 in the Prepaid Rent account on January 1 , 2024 . At the end of January, $3,000 was paid for the February rent and was debited to the Prepaid Rent account. All the rent payments during the year were treated the same way. The rent for July to December increased to $4,ooo per month. (Hint: determine the amount of rent expense for 2024, as well as the correct amount that has been prepaid for 2025 , and make an adjustment that will bring both these accounts to the correct balances.) 4. A count of the supplies at year end revealed that $500 of supplies were still on hand. 5. The building is being depreciated over 20 years with a residual value of $20,000. 6. The bank loan was taken out on April 1, 2024. The first interest payment is due on April 1, 2025. The interest rate is 9%. 7. Income tax for the year should be calculated using a tax rate of 30%. (Hint: after you finish the other adjusting entries, you will have to determine the income before income tax and then calculate the tax as 30% of this amount.)
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