Question
The Rohrbach Company has the following trial balance at the end of Year Four before adjusting entries are prepared. During the year, all cash transactions
The Rohrbach Company has the following trial balance at the end of Year Four before adjusting entries are prepared. During the year, all cash transactions were recorded, but no other journal entries were made.
Figure 5.20 account payable credit 33,400
account receivable debit 79,000
capital stock credit 90,000
cash debit 41,000
cost of goods sold debit 180,000
dividends paid debit 20,000
insurance expense debit 7,400
inventory debit 98,000
land debit 320,000
notes payable credit 130,000
prepaid rent debit 10,000
retained earnings January 1 year four credit 200,000
salary expense debit 88,000
sales revenue credit 400,000
utilities expense debit 10,000
total credit and debit 853,000
Rohrbach Company Unadjusted Trial Balance, December 31, Year Four
Utilities were not paid for or recorded for the months of November and December at a total of $2,000.
2.On January 1, Year Four, insurance for six months was obtained for $2,000 in cash. On July 1, Year Four, insurance for another eighteen months was obtained for $5,400 in cash.
3.On January 1, Year Four, the company paid $2,000 to rent a building for four months. On May 1, Year Four, the company paid another $8,000 to rent the same building for an additional sixteen months.
4.Employees are paid $8,000 for each month with payments seven days after the end of the month.
Required:
A. Prepare the needed adjusting entries.
B. Prepare an updated trial balance.
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