Question
The Green Thumb Gardener is a retail store that sells plants, soil, and decorative pots. On December 31, 2019, the firm's general ledger contained the
The Green Thumb Gardener is a retail store that sells plants, soil, and decorative pots. On December 31, 2019, the firm's general ledger contained the accounts and balances that appear below.
ACCOUNTS AND BALANCES
Cash $4,800 Dr.
Accounts Receivable 1,700 Dr.
Allowance for Doubtful Accounts 43 Cr.
Merchandise Inventory 10,400 Dr.
Supplies 1,110 Dr.
Prepaid Advertising 1,080 Dr.
Store Equipment 7,560 Dr.
Accumulated DepreciationStore Equipment 1,410 Cr.
Office Equipment 1,060 Dr.
Accumulated DepreciationOffice Equipment 190 Cr.
Accounts Payable 2,535 Cr.
Social Security Tax Payable 340 Cr.
Medicare Tax Payable 79 Cr.
Federal Unemployment Tax Payable
State Unemployment Tax Payable
Salaries Payable
Beth Argo, Capital 21,015 Cr.
Beth Argo, Drawing19,100Dr.
Sales 85,548 Cr.
Sales Returns and Allowances 1,010 Dr.
Purchases 43,700 Dr.
Purchases Returns and Allowances 340 Cr.
Rent Expense 5,100 Dr.
Telephone Expense 500 Dr.
Salaries Expense 13,200 Dr.
Payroll Taxes Expense 1,180 Dr.
Income Summary
Supplies Expense
Advertising Expense
Depreciation ExpenseStore Equipment
Depreciation ExpenseOffice Equipment
Uncollectible Accounts Expense
Adjustments:
a.-b.Merchandise inventory on December 31, 2019, is $11,421.
c. During 2019, the firm had net credit sales of $26,000; the firm estimates that 0.5 percent of these sales will result in uncollectible accounts.
d. On December 31, 2019, an inventory of the supplies showed that items costing $230 were on hand.
e. On October 1, 2019, the firm signed a six-month advertising contract for $1,080 with a local newspaper and paid the full amount in advance.
f. On January 2, 2018, the firm purchased store equipment for $7,560. At that time, the equipment was estimated to have a useful life of five years and a salvage value of $510.
g. On January 2, 2018, the firm purchased office equipment for $1,060. At that time, the equipment was estimated to have a useful life of five years and a salvage value of $110.
h. On December 31, 2019, the firm owed salaries of $1,740 that will not be paid until 2020.
i. On December 31, 2019, the firm owed the employer's social security tax (assume 6.2 percent) and Medicare tax (assume 1.45 percent) on the entire $1,740 of accrued wages.
j. On December 31, 2019, the firm owed federal unemployment tax (assume 0.6 percent) and state unemployment tax (assume 5.4 percent) on the entire $1,740 of accrued wages.
What I need to do:
- Make the Trial Balance section of a 10-column worksheet. The worksheet covers the year ended December 31, 2019.
- Enter the adjustments above in the Adjustments section of the worksheet.
- Complete the worksheet.
And Answer the following question: By what amount were the assets of the business affected by adjustments?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started