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Create the adjusted trial balance. SSC employs the accrual method of accounting; B Smart opened the business on January 1, 2019 with an investment of

Create the adjusted trial balance.

  • SSC employs the accrual method of accounting;
  • B Smart opened the business on January 1, 2019 with an investment of $100,000;
  • The Cash account balance at the close of business on December 31, 2019 was $20,000 (do not attempt to recreate this balance just happily accept it);
  • SSC issued a $25,000, 16-month, 4% note on October 1, 2019 - principal and total interest incurred are due at maturity; this is the only interest-bearing debt SSC entered into during 2019;
  • The company purchased only two long-term, depreciable assets during 2019: a vehicle for $45,000 and a computer for $3,250and depreciation was recognized in the amount of $5,000 on the vehicle and $750 on the computer both of these assets will be in service throughout 2020;
  • On January 1, SSC paid $1,800 for an 18-month insurance policy and debited the Prepaid Insurance account for the entire amount - no insurance expense had yet been recognized at the start of business on December 31;
  • SSC recognized bad debt expense on December 31 in the amount of $2,000, which was 2% of the outstanding accounts receivable balance (allowance for doubtful accounts method is used not the direct method);
  • Several qualifying customers took advantage of the 2% 10, net 30 payment terms during 2019, resulting in a Sales Discount account balance of $4,900;
  • B Smart withdrew a total of $23,500 in cash during 2019 from SSC for personal use;
  • In addition to all of the account balances resulting from information provided in the previous bullet points, the general ledger held the following account balances after adjusting journal entries were recorded and posted:

Accounts Payable 1,125

Cost of goods sold 250,000

Land 13,275

Merchandise Inventory 18,250

Rent Expense 21,000

Sales 400,000

Supplies 865

Supplies Expense 1,320

Wages Expense 23,450

Wages Payable 485

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