Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals of Corporate Finance

Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan

8th Edition

978-0073530628, 978-0077861629

More Books

Students also viewed these Corporate Finance questions