Attached is the trial balance for Surfs Up, Inc.

Instructions:

1.Construct General Ledger T-accounts and enter the balances shown.

2.The following adjusting entries have been identified:

a.Bad debt expense is estimated to be $6,000.

b.Annual depreciation expense on the Equipment is $13,000 and annual depreciation expense for building is $8,000.

c.Prepaid Insurance is for 2 years of insurance paid on 1/1/17. Record the amount for 2017.

d.The note payable ($270,000) has interest of 8% per year (simple interest) and the interest is payable on 1/1/18. Record the interest for 2017.

e.Salaries and wages earned but unpaid as of year-end are $9,500 (sales) and $4,500 (administrative).

f.At year-end, $1,100 of Supplies remain on hand.

g.$10,000 of the unearned rent revenue was earned as of 12/31/17.

h. Utilities expense incurred for December, but unpaid and unrecorded was $3,000.

i. Income Tax Rate 25%.

j.Weighted Average Common Shares Outstanding 12/31/17 is 5,000.

Prepare the adjusting journal entries (include explanations) and post the entries to the appropriate general ledger T-accounts (construct additional T-accounts as necessary).

3.Prepare an adjusted trial balance.

4.Prepare a multi-step income statement, statement of retained earnings and a classified balance sheet in good form.

5.Prepare closing journal entries and post to the T-accounts.

6.Prepare a post-closing trial balance.

You should use Excel or a similar spreadsheet program to prepare your work. (your T- accounts can be prepared by hand and postings can be by hand) Your grade will be based on both the accuracy and the organization of your work product. Please submit a hard copy of your work or upload all pieces on blackboard under the assignment. (Submit adjusting journal entries, adjusted trial balance, classified balance sheet, multistep income statement, statement of retained earnings, closing journal entries, post closing trial balance and your final T-accounts after posting closing entries)

Surfs Up, Inc.
Trial Balance
			31-Dec-17
					Debit		Credit
Cash					35,760
Accounts Receivable					83,350
Allowance for Doubtful Accounts							4,000
Supplies					7,110
Inventory					315,240
Prepaid Insurance					14,000
Equipment					422,000
Accumulated Depreciation - Equipment							118,000
Building					500,000
Accumulated Depreciation - Building							15,000
Land					100,000
Accounts Payable							89,500
Notes Payable							270,000
Unearned Rent Revenue							18,000
Common Stock							110,000
Retained Earnings							265,000
Dividends					10,000
Sales Revenue							2,100,000
Rent Revenue							64,000
Cost of Goods Sold					937,440
Salaries and Wages Expense - sales					273,500
Advertising Expense-Sales					78,100
Utilities Expense-Administrative					49,000
Telecommunications -Administrative					32,000
Salaries and Wages Expense - administrative					196,000
					3,053,500		3,053,500	$0