Question
Golden Wedding Dress Company designs custom wedding dresses for brides to be.The person preparing the adjusting entries at year-end was unable to complete the adjustments
Golden Wedding Dress Company designs custom wedding dresses for brides to be. The person preparing the adjusting entries at year-end was unable to complete the adjustments due to illness. You have been given the following unadjusted trial balance along with some additional information for the December 31, 2023, year-end.
Account Unadjusted
Balance Account Unadjusted
Balance
Accounts receivable $ 81,200 Land $ 125,000
Accum. deprec., building 120,000 Merchandise inventory 70,600
Accum. deprec., equipment 336,000 Mortgage payable 221,248
Advance sales 220,000 Note payable 170,000
Allowance for doubtful accounts 500 Other operating expenses 1,165,000
Building 423,000 Sales 1,349,000
Cash 87,500 Salaries & admin expense 34,060
Equipment 627,000
Sales returns and allowances
8,000
Estimated warranty liability 3,600 Sarah Golden, capital 201,012
Other information:
Assume all accounts have a normal balance.
75% of the balance in the Advance Sales account is for wedding dresses to be made and delivered by Golden during 2024; the remaining 25% is from sales earned during 2023.
Golden warranties its wedding dresses against defects and estimates its warranty liability to be 2% of adjusted net sales.
The 3%, 5-year note payable was issued on October 1, 2023; interest is payable annually each September 30.
The mortgage is paid annually on the first day of the next year. The next mortgage payment will be paid consisting of $8,850 interest and $23,929 principal for a total of $32,779.
Uncollectible accounts are estimated to be 1% of outstanding receivables.
A physical count of the inventory showed a balance actually on hand of $62,000.
Sarah promised her operations manager a year-end performance bonus of $2,749, which would be paid with her salary in January for high sales achieved this year.
Required:
1. Based on the information provided, journalize the adjusting entries at December 31, 2023.
2. Prepare a classified balance sheet. (Be sure to list the assets and liabilities in order of their liquidity. Round the final answers to the nearest whole dollar amount.)
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