Presented below is the December 30 Trial balance of Cassini Studios.

Debit Credit

Cash................................................. $14,800

Accounts Receivable....................... 33,600

Allownance for Doubtful Accounts........ $2,160 credit

Inventory, January 1.............................. 62,400

Furniture and Equipment....................... 67,200

Accumulated Depreciation -- Furniture

& Equipment........................................... $26,880 credit

Prepaid Insurance................................... $4,080

Notes Payable 12% interest rate............. $22,400 credit

Paul Jones, Capital 12/29........................ $72,000 credit

Sales ....................................................... $480,000 credit

Purchases ............................................... $320,000

Sales Salaries Expense.......................... $40,000

Advertising Expense .............................. $5,360

Administrative Salaries Expense ............. $52,000

Office Expense ........................................ $4,000

(1) Prepare adjusting entries for the following items:

(a) Adjust the Allownace for Doubtful Accounts to 8 percent of the accounts receivable. Remember there si a $2160 balance in the Allowance account.

(b) Furniture and equipment is depreciated at 20 percent per year.

(c) Insurance expired during the year, $2040.

(d) 12% interest for one year has been accrued to notes payable, ($22,400*12%).

(e) Salaries earne for the last two days in December, but not paid, $1920

(f) January 15, 2014 advertising has been paid in advance, $560.

(g) Office supplies on hand, $1200, charged to Office Expense when purchased.

(2) Prepare closing entries for Cassini after the above adjusting entries have been made. Additional information shows the inventory on December 31, was $64,000. You can summarize the revenues and expenses and close them directly to Income Summary and then close Income Summary into Paul Jones Capital account.

(3) Prepare a post-closing trial balance for Cassini on December 31.

Cassini Studios

Trial Balance

December 31, 2012

Debit Credit

Cash..........................................................

Accounts Receivable ...............................

Allowances for Doubtful Accounts...........

Inventory, December 31.........................

Furniture and Equipment........................

Accumulated Depreciation-- Furniture an Equipment

Prepaid Insurance...............................

Notes Payable.........................................

Paul Jones, Capital on 12/31...................

Sales .....................................................

Purchases ...............................................

Sales Salaries Expense ..........................

Advertising Expense ................................

Salaries Payable .....................................

Office Expense ........................................

Interest Payable ........................................

Office Supplies ..........................................

Other .........................................................

$________ $_________