Mary's Clothes Washing Corporation

Trial Balance

December $31,2023$

Debit Credit

Cash $$22,500$

Accounts Receivable $17,350$

Allowance for Doubtful Accounts $$600$

Inventory, December $3170,350$

Prepaid Insurance $5,200$

Prepaid Rent $15,000$

Equipment $60,000$

Accumulated Depreciation$-$ Eqpuipment $22,500$

Accounts Payable $17,000$

Notes Payable $25,000$

Common Stock $10,000$

Retained Earnings $92,450$

Sales Revenue $397,300$

Cost of Goods Sold $207,400$

Salaries Expense $($sales$)59,850$

Advertising Expense $26,700$

Salaries Expense $($administration$)76,300$

Supplies Expense $4,200$

Total $$564,850$ $$564,850$

Company information: Above is the unadjusted trial balance for Mary's Clothes Washing Corporation. They are a calendar year corporation. They close

their books on December $31$st of every year. They use the straight$-$line method of depreciation.

A$.$ Prepare adjusting journal entries for the following.

$1.$ Equipment is depreciated based on an $8-$year life. The equipment has no salvage value. It was purchased on January $1,2023.$

$2.$ The bad debt expense is estimated to be $$1,450.$ They use the percentage of sales method allowed by GAAP.

$3.$ The insurance was prepaid on January $1,2023.$ It covers the period from January $1,2023$ thru December $31,2023.$

$4.$ The sales team worked the last week in December but will not be paid until January $5,2024.$ They earned $$2,750$ for the $5$ days of work.

$5.$ The note payable is due next July $($short term$).$ The interest that has accrued on the loan is $$1,850,$ but has not been paid or recorded

as of December $21,2023.$

$6.$ Advertising was paid in advance on November $1,2023.$ The amount was $$1,100.$ The company plans to do a large spread magazine advertisement

on January $15,2024.$ A new staff account inadvertently charged the full amount to expense in $2023.$

$7.$ Office supplies on hand totaled $$900.$ That same inexperienced staff accountant had charged the full $$4,200$ to expense even though all of the supplies

had not been used by December $31($year$-$end$).$

$8.$ After an inventory count at year end, the staff accountant noted that the inventory market value was lower than what was on the books $($cost$).$

Market value was determined to be $$68,250$ at December $31($year$-$end$).$

$9.$ The rent was paid in advance, for the full year, on January $1,2023.$