The unadjusted trial balance of LeBrun Co at its year end, July 31, 2019 is as follows:

Some additional accounts will be required: Interest Receivable

Interest Payable

Bad Debt Expense

Amortization Expense

Interest Revenue

Additional Data:

1. The bank statement for July 31, 2019 included a debit memo for Interest Expense of $15 and an NSF cheque received from a customer on account of $75

2. Estimated uncollectible accounts receivable at July 31, 2019 are $2,500

3. The 8% Notes Receivable was issued January 1, 2019 and interest has not been accrued or received

4. A physical count of the inventory determined that only $57,000 was actually on hand

5. Prepaid expenses of $2,000 expired during the year (debit the operating expenses account)

6. Amortization of the capital assets is as follows:

Building - straight-line, 25 years, $15,000 residual value

Equipment - single declining balance, 5 years, $2,000 residual value

Patent - straight-line, 20 years, no residual value

7. The 10% mortgage payable was issued on August 1, 2016. Interest is paid monthly, at the beginning of each month for the previous month's interest. Of the mortgage principle, $1,596 is currently due

8. Accrued liabilities at July 31, 2019 are $1,400 (credit accounts payable)

Instructions:

a. Prepare adjusting entries required as of July 31, 2019 (round numbers to nearest dollar)

b. Prepare an adjusted trial balance

c. Prepare an income statement and classified balance sheet for the year ending July 31, 2019

B D Debit Credit 18,000 200 25,000 2,000 10,000 58,000 16,000 50,000 105,000 A 1 Lebrun Company 2 Trial Balance 3 31-Jul-19 4 Account Title 5 Cash 6 Petty Cash 7 Accounts Receivable 8 Allowance for Doubtful Accounts 9 Notes Receivable (due Dec 31, 2019) 10 Inventory 11 Prepaid Expenses 12 Land 13 Building 14 Accumulated Depriciation - Building 15 Equipment 16 Accumulated Depriciation - Equipment 17 Patent (net of $11,250 accumulated amortization) 18 Accounts Payable 19 Mortgage Payable (due August 1, 2027) 20 Lebrun Capital 21 Lebrun, Drawings 22 Sales 23 Cost of Goods Sold 24 Operating Expenses 25 Interest Expense 26 Totals 27 28 10,800 25,000 12,200 63,750 81,000 121,190 119,937 15,000 750,000 600,000 100,000 11,177 1,097,127 1,097,127