Dorn, Inc., a small service company, keeps its records without the help of an accountant. After much
Question:
Dorn, Inc., a small service company, keeps its records without the help of an accountant. After much effort, an outside accountant prepared the following unadjusted trial balance as of the end of the annual accounting period, December 31. 2004:
Data not yet recorded at December 31. 2004:
a. The supplies counted on December 3 1 . 2004. reflected S300 remaining on hand to be used in 2005.
b. Insurance expired during 2004. $500.
c. Depreciation expense for 2004. $4,000.
d. Wages earned by employees not yet paid on December 3 1 . 2004. S900.
e. Income tax expense was $7,350.
Required: 1. Record the 2004 adjusting entries. 2. Prepare an income statement and a classified balance sheet that include the effects of the preceding five transactions. 3. Record the 2004 closing entries.
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