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prepare adjusting entries 2 The trial balance for Lontoc Fireplaces Inc. for December 31, 2022, follows: begin{tabular}{|l|r|r|} hline & Debit & Credit hline Cash
prepare adjusting entries
2 The trial balance for Lontoc Fireplaces Inc. for December 31, 2022, follows: \begin{tabular}{|l|r|r|} \hline & Debit & Credit \\ \hline Cash & 89000 & \\ \hline Accounts receivable & 38000 & \\ \hline Inventory & 95000 & \\ \hline Supplies On Hand & 5000 & \\ \hline Prepaid rent & 46000 & \\ \hline Land & 80000 & \\ \hline Building & 150000 & \\ \hline Accumulated depreciation, building & & 19500 \\ \hline Accounts payable & & 21400 \\ \hline Wages payable & & 0 \\ \hline Interest payable & & 0 \\ \hline Income tax payable & & 0 \\ \hline Unearned revenue & & 12400 \\ \hline Bank loan payable & & 40000 \\ \hline Owner Equity & & 166700 \\ \hline Sales revenue & & 840000 \\ \hline Cost of goods sold & 95000 & \\ \hline Wages expense & 0 & \\ \hline Rent expense & 0 & \\ \hline Supplies expense & 0 & \\ \hline Depreciation expense & 0 & \\ \hline Interest expense & 14000 & \\ \hline Miscellaneous expense & 6000 & \\ \hline Withdrawls & 1100000 & 1100000 \\ \hline Totals & & \\ \hline \end{tabular} Additional information for adjusting entries: 1. The deposits from customers were for future deliveries. As at December 31 , half of these goods had been delivered. 2. There is $2,000 in wages owed at year end. 3. Rent is paid in advance on the last day of each month. There was a balance of $3,000 in the Prepaid Rent account on January 1,2022 At the end of January, $3,000 was paid for the February rent and was debited to the Prepaid Rent account. All the rent payments during the year were treated the same way. The rent for July to December increased to $4,000 per month. (Hint: Determine the amount of rent expense for 2022, as well as the correct amount that has been prepaid for 2023 , and make an adjustment that will bring both these accounts to the correct balances.) 4. A count of the supplies at year end revealed that $500 of supplies were still on hand. 5. The building is being depreciated over 20 years with a residual value of $20,000. 6. The bank loan was taken out on April 1, 2022. The first interest payment is due on April 1, 2023. The interest rate is 9% Step by Step Solution
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