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The trial balance of Bellemy Fashion Center contained the following accounts at December 31, 2015, the end of the companys fiscal year. Bellemy Fashion Center

The trial balance of Bellemy Fashion Center contained the following accounts at December 31, 2015, the end of the companys fiscal year.

Bellemy Fashion Center

Trial Balance

December 31, 2015

Debit Credit
Cash $28,700
Accounts Receivable 21,200
Allowance for doubtful Accounts $ 1,700
Notes Receivable 12,500
Merchandise Inventory 45,000
Store Supplies 5,500
Prepaid Insurance 8,200
Store Equipment 85,000
Accumulated Depreciation - Store Equipment 18,000
Delivery Equipment 48,000
Accumulated Depreciation - Delivery Equipment 6,000
Notes Payable 51,000
Accounts Payable 48,500
Share Capital - Ordinary 90,000
Retained Earnings 40,500
Dividends 24,300
Sales 755,100
Sales Returns and Allowances 4,200
Cost of Goods Sold 495,000
Salaries Expense 140,000
Utilities Expense 14,000
Repair Expense 12,100
Delivery Expense 16,700
Rent Expense 24,000
Advertising Expense 26,400

Directions

Prepare the adjusting entries for these accounts:

- Store supplies

- Depreciation

- Receivables

- Payables

- Salaries expense

- Insurance Expense

- COGS

ADJUSTING ENTRIES
Date Account Debit Credit
Dec. 31 Supplies expense $3,700
Store Supplies $3,700
(Assume the store supplied $1,800 at the end)
Dec. 31 Depreciation Expense $16,000
Accumulated Depreciation - Store Equipment $10,000
Accumulated Depreciation - Delivery Equipment $6,000
(Assume that depreciation expense is $10,000 per year on Store equipment and $6,000 per year on Delivery equipment)
Dec. 31 Baddebt Debt expense $420
Allowance for doubtful Accounts $420
(Assume the Allowance for doubtful accounts to be 10% of Accounts receivable)
Dec. 31 Interest Expense $3,060
Interest Payable $3,060
(Assumed interest is due for current year @6% on notes payable)
Dec. 31 Salary expense $10,000
Salary payable $10,000
(Assumed that Salary for last few days are payable)
Dec. 31 Insurance expense $6,000
Prepaid Insurance $6,000
(Assumed insurance expired during the period)
Dec. 31 Cost of goods sold $3,000
Merchandise Inventory $3,000

(Assumed the physical inventory counted on Dec. 31 is $42,000. Hence shortages adjusted)

4.Prepare financial statements

5.Journalize and post-the closing entries

6.Prepare a post-closing trial balance

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