Question
The following trial balance (at the end of Year Three) was produced by an accountant working for the Washburn Company. No adjusting entries have yet
The following trial balance (at the end of Year Three) was produced by an accountant working for the Washburn Company. No adjusting entries have yet been made. During the year, all cash transactions were recorded, but no other journal entries were prepared.
Account Debit credit
Account payable 27000
Account Receivable 65000
Capital Stock 120000
Cash 29000
Cost of good sold 232000
Dividends paid 14000
Insurance expense 10000
Inventory 132000
Land 270000
Note Payable 170000
Prepaid rent 10000
Retained earnings january year three 150000
Salary expense 110000
Sale revenues 450000
Supplies expense 8000
utilities expense 37000
total 917000 917000
Other Information: 1. Income taxes of $9,000 will have to be paid for Year Three early in Year Four. 2. Supplies were bought for $8,000 early in the year, but $3,000 of that amount is still on hand at the end of the year. 3. On January 1, Year Three, insurance for eight months was obtained for $4,000 in cash. On September 1, Year Three, insurance for another fifteen months was obtained for $6,000 in cash. 4. During November, a payment of $5,000 was made for advertising during that month. By accident, the debit was made to utilities expense. 5. On January 1, Year Three, the company paid $2,000 to rent a building for four months. On May 1, Year Three, the company paid another $8,000 to rent the same building for an addition sixteen months. 6. Employees are paid $10,000 for each month with payments two weeks after the end of the month. Required: A. Prepare the needed adjusting entries. B. Prepare an income statement, statement of retained earnings, and a balance sheet for the Washburn Company.
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