Excalibur Corporation sells video games for personal computers. The unadjusted trial balance as

of December 31 appears on the following page. Information necessary to prepare the yeaR

end adjusting entries appear below:

1.

The office equipment was purchased two years ago and is being depreciated straight line

over eight years with no salvage value.

2.

Accrued salaries and wages at year end should be $4,500.

3.

The company borrowed $30,000 on Septemb

er 1. The principal is due to be repaid in 10

years. Interest on the note is payable twice a year: On August 31 and February 28 at an

annual rate of 10% (or 5% every six months).

4.

The company charges the Supplies

Expense

account when supplies are purchase

d.

Supplies on hand at year end cost $500.

5.

Prepaid rent at year end should be $1,000.

Required:

Complete the worksheet on the following page

Account Unadjusted Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet Cash 23,300 Accounts Receivable 32,500 Supplies Prepaid Rent 65,000 Inventory Equipment Accumulated Depreciation 75,000 10,000 Accounts Payable 26,100 Wages Payable 3,000 Note Payable 30,000 Interest Payable Common Stock 80,000 Retained Earnings 16,050 Sales revenue 180,000 Cost of Goods Sold 95,000 Interest Expense Wage Expense 32,350 Rent Expense 14,000 2,000 Supplies Expense Utility Expense 6,000 Depreciation Expense Subtotals 345,150 345,150 Net Income Totals 345,150 345150