Tri$-$Area Inc.

Unadjusted Trial Balance

For Years $2024$ & $2023$

$\backslash$table$[[,12/31/24,12/31/23],[$Cash$,4,700,,2,500,],[$Accounts receivable,$29,400,,20,600,],[$Receivable from factor$],[$Allowance for doubtful accounts,$100,,,600],[$Inventory$,40,000,,21,660,],[$Prepaid rent,$1,500,,3,000,],[$Land$,5,000,,5,000,],[$Building$,35,000,,20,000,],[$Less accumulated depreciation$-$ bldg$,,9,000,,9,000],[$Equipment$,84,500,,75,000,],[$Less: accumulated depreciation$-$equip,$41,500,,45,000],[$Accounts payable,,$7,500,,6,500],[$Interest payable,,$2,800,,2,000],[$Unearned revenue,,$1,800,,1,600],[$Recourse liability$],[$Income tax payable,,$4,700,,8,000],[$Dividends Payable,,$900,,1,500],[$Notes payable,,$12,000,,5,000],[$Common stock,,$43,660,,43,660],[$Retained earnngs,,$24,900,,24,900],[$Dividends declared,$4,800,,,],[$Sales$,,169,440,,],[$Service revenue,,$33,210,,],[$Cost of goods sold,$85,560,,,],[$Selling$,24,260,,,],[$Bad debt expense$],[$Depreciation expense$],[$General and administrative,$34,600,,,],[$Interest expense,$1,200,,,],[$Loss on sale of equipment,$250,,,],[$Loss on sale from receivables$],[$Income tax expense$],[$Wages expense,$540,,,],[$Totals$,351,410,351,410,147,760,147,760]]$

Additional information

Equipment was purchased with cash.

Equipment costing was sold

Accumulated depreciation

Loss on sale

$4.$ Cash divividend declared

$5.$ All other changes were for cash

Add more adjustments

Requirements:

Make the appropriate adjusting entries

From the adjusted trail balance do the required financial statements:

MultiStep Income Statement

Statement of Retained Earnings

Classified Balance Sheet

Statement of Cash Flows $($either method$)$

Prepare closing entries

Prepare the post closing trial balance

Prepare reversing entries.

ADJUSTMENTS

$1$

Bad debt is estimated to be a percentage of Accounts receivable.

$27650*.03$

Took out a new note for $$4,500$ on $\frac{6}{1}\frac{?}{24},$ for new equipment.

Bookkeeper has not recorded the note or interest

$8\mathrm{.}0\%$

Need to bill a client for work

$3$ performed. Contract was for $1,000$ shirts at $$5$ per shirt. Shipped $650$ shirts.

$4$ Discovered when we took a physical count we had shrinkage of $$500.$

$5$ Depreciation

Building straight line for $20$ years no residual valueon original building.

New addition estimated to be for $10$ years no residual value.

$6$ Depreciation equipment

Old equipment $10\%$ of cost

New equipment $5\%$ of cost the first year

$7$ Income tax rate

$30\%$

$8$ Tri$-$Area Inc. has $1$ employee that earn $$1,500$ each week

The company has $10$ emploees with a weekly income of $$900.$

The year ends on Tuesday.

$9$ On December $30$ of this year Tri$-$Area factored $$5,000$ of the accounts receivable.

The factor will keep $10\%$ for returns to be paid in thirty days.

The discount rate is $9\%$ with recourse of $$400.$

This was not recorded due to the bookkeeper not sure how to record the entry.

Keep the receivable from factor as a separate receivable.

$10$ Contract Modification$-$ Cumulative Catch$-$Up Method$-$

On October $15,2023$ Tri$-$Area Inc. entered into a cotract to sell $750$ units for $$11,250($$$15$ per unit$)$ toDesk Top Inc. Tri$-$Area expexted to deliver the unitss in December and January. On December $15$ after $500$ units were delivered reduced the price on the remaining units to $$10\mathrm{.}50$ per unit.