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, 2016, appears below.

Account Title Debits Credits
Cash 40,950
Accounts receivable 43,000
Supplies 1,100
Inventory 63,000
Note receivable 16,800
Interest receivable 0
Prepaid rent 1,200
Prepaid insurance 0
Office equipment 64,000
Accumulated depreciationoffice equipment 24,000
Accounts payable 22,000
Salaries and wages payable 0
Note payable 46,800
Interest payable 0
Deferred revenue 0
Common stock 60,000
Retained earnings 16,000
Sales revenue 163,000
Interest revenue 0
Cost of goods sold 73,350
Salaries and wages expense 15,600
Rent expense 6,600
Depreciation expense 0
Interest expense 0
Supplies expense 600
Insurance expense 3,400
Advertising expense 2,200
Totals 331,800 331,800

Information necessary to prepare the year-end adjusting entries appears below.
1. Depreciation on the office equipment for the year is $8,000.
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, 2016, were $900.

3.

On October 1, 2016, Pastina borrowed $46,800 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, 2016, the company lent a supplier $16,800 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2017.

5.

On April 1, 2016, the company paid an insurance company $3,400 for a two-year fire insurance policy. The entire $3,400 was debited to insurance expense.

6. $560 of supplies remained on hand at December 31, 2016.
7.

A customer paid Pastina $1,080 in December for 900 pounds of spaghetti to be delivered in January 2017. Pastina credited sales revenue.

8.

On December 1, 2016, $1,200 rent was paid to the owner of the building. The payment represented rent for December 2016 and January 2017, at $600 per month.

2.

value: 3.00 points

Required information

Required:
1. & 2.

Post the opening balances and adjusting entires into the appropriate t-accounts. (Enter the number of the adjusting entry in the column next to the amount. Do not round intermediate calculations.)

Information necessary to prepare the year-end adjusting entries appears below.
1.

Depreciation on the office equipment for the year is $8,000.

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, 2016, were $900.

3.

On October 1, 2016, Pastina borrowed $46,800 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, 2016, the company lent a supplier $16,800 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2017.

5.

On April 1, 2016, the company paid an insurance company $3,400 for a two-year fire insurance policy. The entire $3,400 was debited to insurance expense.

6. $560 of supplies remained on hand at December 31, 2016.
7.

A customer paid Pastina $1,080 in December for 900 pounds of spaghetti to be delivered in January 2017. Pastina credited sales revenue.

8.

On December 1, 2016, $1,200 rent was paid to the owner of the building. The payment represented rent for December 2016 and January 2017, at $600 per month.

Required:
1. & 2.

Post the opening balances and adjusting entires into the appropriate t-accounts. (Enter the number of the adjusting entry in the column next to the amount. Do not round intermediate calculations.)

References

eBook & Resources

WorksheetLearning Objective: 02-03 Post the effects of journal entries to general ledger accounts and prepare an unadjusted trial balance.Learning Objective: 02-06 Describe the four basic financial statements.

Difficulty: 3 HardLearning Objective: 02-05 Record adjusting journal entries in general journal format, post entries, and prepare an adjusted trial balance.Learning Objective: 02-07 Explain the closing process.

Check my work

3.

value: 3.00 points

Required information

3.

Prepare an adjusted trial balance.

References

eBook & Resources

WorksheetLearning Objective: 02-03 Post the effects of journal entries to general ledger accounts and prepare an unadjusted trial balance.Learning Objective: 02-06 Describe the four basic financial statements.

Difficulty: 3 HardLearning Objective: 02-05 Record adjusting journal entries in general journal format, post entries, and prepare an adjusted trial balance.Learning Objective: 02-07 Explain the closing process.

Check my work

4.

value: 3.00 points

Required information

For requirement 4, Assume that no common stock was issued during the year and that $3,600 in cash dividends were paid to shareholders during the year.
4.

Prepare the income statement, statement of shareholders' equity and classified balance sheet for the year ended December 31, 2016. (For Balance Sheet only, items to be deducted must be indicated with a negative amount. Other expenses should be indicated with a minus sign.)

rev: 01_28_2015_QC_CS-5258

References

eBook & Resources

Financial StatementsLearning Objective: 02-03 Post the effects of journal entries to general ledger accounts and prepare an unadjusted trial balance.Learning Objective: 02-06 Describe the four basic financial statements.

Difficulty: 3 HardLearning Objective: 02-05 Record adjusting journal entries in general journal format, post entries, and prepare an adjusted trial balance.Learning Objective: 02-07 Explain the closing process.

Check my work

5.

value: 3.00 points

Required information

5.

Prepare closing entries. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

References

eBook & Resources

General JournalLearning Objective: 02-03 Post the effects of journal entries to general ledger accounts and prepare an unadjusted trial balance.Learning Objective: 02-06 Describe the four basic financial statements.

Difficulty: 3 HardLearning Objective: 02-05 Record adjusting journal entries in general journal format, post entries, and prepare an adjusted trial balance.Learning Objective: 02-07 Explain the closing process.

Check my work

6.

value: 3.00 points

Required information

6.

Prepare a 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

Step: 3

blur-text-image

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

More Books

Students also viewed these Accounting questions

Question

What are the steps in the strategic management process?

Answered: 1 week ago

Question

What would I do next and why?

Answered: 1 week ago

Question

Can workers be trained in ethics? How? Defend your answer.

Answered: 1 week ago