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D- On November 1, 2018, Accounting Creations loaned a key supplier, $25,000. A promissory note was signed and issued. The note is due in full

D- On November 1, 2018, Accounting Creations loaned a key supplier, $25,000. A promissory note was signed and issued. The note is due in full 6-months. The supplier agrees to pay interest on the note at an annual rate of 3%. Principle and interest will be paid at the end of the 6-months. The note was recorded in Notes Receivable and is the only note outstanding.

E- Per a physical count of office supplies, $5,615 of supplies remained at the end of 2018. The balance on the worksheet in the office supplies account represents last years ending balance. During the year, $35,000 of office supplies were purchased and immediately expensed.

F- On November 1, 2018 Accounting Creations paid ABC Advertising $16,000 for a four-month campaign of advertising services. Equal services are provided each month.

Accounting Creations was authorized to issue 3,000,000 shares of $1 par Common Stock but has only issued 650,000 shares of common stock as of 12/31/2018. No new shares were issued during 2018.

1. On the Adjusting Journal Entries worksheet, prepare in journal entry form all adjusting and correcting journal entries based on the following information. All information was provided to you as of 12/31/2018. (Round all numbers to the nearest dollar). Label journal entries a through t.

Accounting Creations Incorporated
End of Period Worksheet
For the Year Ended December 31, 2018
Unadjusted Adjusted
Account Title Trial Balance Adjustments Trial Balance
DR CR DR CR DR CR
Cash 330,000 -
Accounts Receivable 694,980 -
Allowance for Doubtful Accounts - 17,000
Interest Receivable - -
Merchandise Inventory 425,000 -
Prepaid Insurance - -
LIFO Reserve - 32,000
Prepaid Advertising - -
Prepaid Rent 17,000 -
Office Supplies 6,000 -
Note Receivable 25,000
Available for Sale Securities 375,000 -
Office Building 3,750,000 -
Accumulated Depreciation - Office Building - 87,500
Storage Building 1,275,000 -
Accumulated Depreciation - Storage Building - -
Land 750,000 -
Leasehold Improvements 225,000 -
Accumulated Depreciation - Leasehold Improvements - -
Office Equipment 325,000 -
Accumulated Depreciation - Office Equipment - 65,000
Patent 150,000 -
Accounts Payable - 345,000
Sales Tax Payable - -
Salaries Payable - 142,000
Payroll Taxes Payable - 25,000
Interest Payable - -
Income Tax Payable - -
Unearned Rent Revenue - -
Loan Payable - Onstar Bank - 650,000
Loan Payable - Coldstar Bank - 2,000,000
Common Stock - 650,000
Additional Paid in Capital - 1,998,750
Retained Earnings - 920,000
Accumulated Other Comprehensive Income - 25,000
Dividends 84,750 -
Sales - 4,528,200
Sales Returns and Allowances 42,250 -
Sales Discounts 19,250 -
Cost of Goods Sold 1,979,500 -
Sales Salaries Expense 436,400 -
Office Salaries Expense 274,000 -
Advertising Expense 16,000 -
Depreciation Expense - Office Building -
Depreciation Expense - Leasehold Improvements - -
Depreciation Expense - Office Equipment - -
Leasing Expense - Stores 132,000 -
Miscellaneous Selling Expense 23,000 -
Research & Development Expense 15,000
Rent Expense - Storage Facility - -
Insurance Expense 15,000 -
Office Supplies Expense 35,000 -
Miscellaneous Administrative Expense 9,170 -
Rent Revenue - 75,000
Interest Revenue on Note Receivable - -
Dividend Revenue on AFS Securities - 25,000
Interest Expense - -
Bad Debt Expense 35,000 -
Amortization Expense - -
Income Tax Expense - -
Payroll Taxes Expense 121,150 -
11,585,450 11,585,450

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