Requirements

Use the following transaction descriptions and the spreadsheet with the unadjusted trial balance to compose the following items:

1. Adjusting journal entries for end of year adjusting transactions (year ends Dec 31)

2. End of year adjusted trial balance

3. Income Statement

4. Statement of Retained Earnings

5. Balance Sheet

Transactions

1. The equipment was purchased on January 1. Widget Co expects a 5 year life and a residual value of $500. They use the double-declining balance method of depreciation.

2. Widget Co uses the percentage of credit sales method for estimating bad debts. Their historical bad debt percentage is 0.5%. All sales are on credit.

3. The note was issued on July 1 and is a 3 year note issued at 4% interest. The interest is paid every 12 months.

4. The bond was issued on October 1 at 6%, which is the market rate. It is a 5 year bond and interest is paid every 6 months.

INFORMATION NEEDED attached in photo:

Widget Co. Unadiusted Trial Balance Year Ended Dec 31 Debit Credit 4,500 2,200 Cash Accounts Receivable Allowance for Doubtful Accounts Inventory Interest Receivable Note Receivable Equipment Accumulated Depreciation Accounts Payable Sales Tax Payable Interest Pavable Bond Payable Common Stock Sales Revenue Sales Discounts & Returns Cost of Goods Sold Advertising Expense Bad Debt Expense Depreciation Expense Office Supplies Expense Rent Expense Wages Expense Interest Income Interest Expense 220 600 0 3,000 4,000 0 1,800 380 0 5,000 5,000 10,000 450 4,500 600 0 0 350 1,200 1,000 0 0 22,40022,400