Question
The Unadjusted Trial Balance for Snowcrest Ltd. for December 31, 2017, is presented below. Debit Credit Cash $ 31,000 Inventory 24,000 Advances to salespersons (Prepaid
The Unadjusted Trial Balance for Snowcrest Ltd. for December 31, 2017, is presented below.
| Debit | Credit |
Cash | $ 31,000 |
|
Inventory | 24,000 |
|
Advances to salespersons (Prepaid commissions) | 1,000 |
|
Prepaid rent | 0 |
|
Office supplies | 2,000 |
|
Equipment | 20,000 |
|
Accumulated amortizationequipment |
| $ 4,000 |
Deposits from customers (Revenue received in advance) |
| 0 |
Bank Loan Common shares |
| 20,000 40,000 |
Retained earnings |
| 9,000 |
Sales revenue |
| 220,000 |
Cost of goods sold | 130,000 |
|
Salespersons' commissions | 35,000 |
|
Office salaries | 25,000 |
|
Rent expense | 6,500 |
|
Miscellaneous expenses | 15,000 |
|
Dividends declared | 3,500 |
|
Totals | $293,000 | $293,000 |
Information for Adjusting Entries:
The Sales figure includes Deposits from Customers of $2,800 for goods to be delivered
in the future.
Half of the Advances to Salespersons have been earned by them, by December 31.
Office Salaries owed at year end. but not paid are $900.
The Rent Expense figure includes $500 paid in advance for 2018.
A count of the Office Supplies revealed that $600 was still on hand at year end.
Amortization on the equipment for 2017 was $1,400.
The one year bank loan carries annual interest rate of 5%. Interest is due when bank loan matures on June 30, 2018.
Required:
Prepare the Adjusting Entries for the above items, in general journal form, for the year ended December 31, 2017. The company prepares adjustments annually.
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