The FUN Toys Company is a publicly traded retailing company that sells videos games and small toys for children ages 2 to 10 years. The fiscal year for the company begins on January 1st and ends on December 31st . The company publishes financial statements at the end of each quarter. Below is a trial balance that was generated by the accounting department before any adjusting journal entries were made.

The company must make the following adjusting journal entries before the financial statements are published to the stockholders.

a. Depreciation on office and warehouse equipment is calculated to be $4,000.

b. The supplies inventory report shows that the company has $4,000 of supplies on hand.

c. On August 1st the company re-established its short term revolving credit agreement with Citibank. Citibank issued $40,000 to the company on this date and the loan principal and interest must be repaid in six months. The interest charged on the loan is 6%.

d. The company has a $150,000 long term debt obligation on its books. The company engaged in a loan with Wells Fargo on July 1st 2012. The loan and interest is due in 5 years and the interest rate is 4.5%.

e. On April 1st the company received the proceeds of a $50,000 loan from Wells Fargo that is due in 2 years. The interest rate on this loan is 4.8%.

f. The company issued invoices to three customers who purchased toys in bulk on account. The toys were shipped and the credit department verified the financial strength of the three customers. The invoices that were issued totaled $75,000. The cost of the toys shipped to the customers totaled $50,000.

g. The company received a utility invoice that will be paid next month. The amount due on the invoice is $2,200.

h. The company has a contract with the local TV network to broadcast commercials that promote the brand and various products. In December, the network ran advertisements for the company at a total cost of $25,000. This amount was paid in full on September 15 th .

i. Employee wages and salaries for the month of December totaled $80,000. This will be paid the following month.

j. The company has an insurance policy with Travelers that provides theft and damage protection on inventory as well as liability insurance. The cost of the policy is $39,600; half the policy is paid on March 1st and the other half is paid on September 1st .

k. On October 1 st, the company issued a loan to a customer who was unable to pay an invoice. The customer will repay $40,000 in 1 year with 6% interest.

l. On November 15th a customer paid $40,000 in cash to purchase custom toys. The company agreed to ship half the toys in the December and the other half in January. On December 15th the company shipped half of the $40,000 order. The cost of the toys shipped was $10,000.

m. The company assessed tax expense at a rate of 30%. This was applied to all income earned by the company before taxes were applied (IBIT). Taxes will be paid on April 15th next year.

n. The company entered the closing entry into the accounting system.

1. Set up all the appropriate t-accounts and enter the beginning balance shown on the trial balance. Record each of the adjusting journal entries into the t-accounts. Then, calculate and show the ending balance. You may need to add accounts that are not shown on the trial balance. Hint: You might want to set up your t-accounts under the balance sheet equation.

FUN Toys Company Trial Balance At December 31, 2014 Unadjusted Trial Balance Debit Credit Cash $ 260,000 Accounts Receivable $ 17,000 Prepaid Advertising $ 25,000 Prepaid Insurance $ 16,500 Inventory $ 280,000 Notes Receivable $ 40,000 Supplies $ 7,500 Equipment $ 250,000 Accumulated Depreciation $ 75,000 Building $ 370,000 Accounts Payable $ 125,000 Unearned Revenue $ 40,000 Notes Payable (short-term). $ 40,000 Notes Payable (long-term) $ 200,000 Interest Payable $ 16,788 Contributed Capital $ 300,000 Retained Earnings $ 327,000 Revenue $ 655,700 COGS $ 225,000 Utilities Expense $ 28,000 Advertising Expense $ 50,000 Insurance expense $ 29,700 Depreciation Expense $ 44,000 Interest Expense $ 16,788 Wage Expense $ 120,000 $ 1,779,488 $ 1,779,488 lalalalalalalala AA