Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

[The following information applies to the questions displayed below.] Pastina Company sells various types of pasta to grocery chains as private label brands. The company's

[The following information applies to the questions displayed below.]

Pastina Company sells various types of pasta to grocery chains as private label brands. The company's fiscal year-end is December 31. The unadjusted trial balance as of December 31, 2018, appears below.

Account TitleDebitsCreditsCash39,550Accounts receivable47,000Supplies1,300Inventory67,000Note receivable20,400Interest receivable0Prepaid rent1,600Prepaid insurance0Office equipment72,000Accumulated depreciationoffice equipment27,000Accounts payable26,000Salaries and wages payable0Note payable50,400Interest payable0Deferred revenue0Common stock60,000Retained earnings18,000Sales revenue183,000Interest revenue0Cost of goods sold82,350Salaries and wages expense16,800Rent expense8,800Depreciation expense0Interest expense0Supplies expense800Insurance expense4,200Advertising expense2,600Totals364,400364,400

Information necessary to prepare the year-end adjusting entries appears below.

  1. Depreciation on the office equipment for the year is $9,000.
  2. Employee salaries and wages are paid twice a month, on the 22nd for salaries and wages earned from the 1st through the 15th, and on the 7th of the following month for salaries and wages earned from the 16th through the end of the month. Salaries and wages earned from December 16 through December 31, 2018, were $1,100.
  3. On October 1, 2018, Pastina borrowed $50,400 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years.
  4. On March 1, 2018, the company lent a supplier $20,400 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2019.
  5. On April 1, 2018, the company paid an insurance company $4,200 for a two-year fire insurance policy. The entire $4,200 was debited to insurance expense.
  6. $680 of supplies remained on hand at December 31, 2018.
  7. A customer paid Pastina $1,320 in December for 1,100 pounds of spaghetti to be delivered in January 2019. Pastina credited sales revenue.
  8. On December 1, 2018, $1,600 rent was paid to the owner of the building. The payment represented rent for December 2018 and January 2019, at $800 per month.

6.Prepare post-closing trial balance.

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

Financial Accounting

Authors: Jamie Pratt, Michael F Peters

11th Edition

1119745322, 978-1119745327

More Books

Students also viewed these Accounting questions

Question

=+What is the response variable?

Answered: 1 week ago