Question
The following trial balance was taken from the books of XYZ Corporation on December 31, 2020. Account Debit Credit Cash $ 12,000 Accounts Receivable 40,000
The following trial balance was taken from the books of XYZ Corporation on December 31, 2020.
Account Debit Credit
Cash $ 12,000
Accounts Receivable 40,000
Note Receivable 7,000
Allowance for Doubtful Accounts $ 1,800
Inventory 44,000
Prepaid Insurance 4,800
Equipment 105,000
Accumulated DepreciationEquip. 15,000
Accounts Payable 10,800
Share CapitalOrdinary 44,000
Retained Earnings 55,000
Sales Revenue 260,000
Cost of Goods Sold 111,000
Salaries and Wages Expense 50,000
Rent Expense 12,800
Totals $386,600 $386,600
At year end, the following items have not yet been recorded.
a. Insurance expired during the year, $2,000.
b. Estimated bad debts, 1% of gross sales.
c. Depreciation on equipment, 10% per year.
d. Interest at 5% is receivable on the note for one full year.
*e. Rent paid in advance at December 31, $5,400 (originally charged to expense).
f. Accrued salaries and wages at December 31, $5,800.
,
INSTRUCTIONS:
(A) Prepare the necessary adjusting entries.
(B) Prepare adjusted trial balance.
(C) Prepare income statement and balance sheet.
(D) Prepare the necessary closing entries.
(E) Prepare trial balance after closing entries.
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