P5—1 6 (Appendix 5A: Completing the work sheet and preparing the financial statements) The following unadjusted trial balance is presented for J. Feeney, Inc., as of December 31, 1997. Unadjusted Trial Balance Account Debit Credit Cash Accounts Receivable Merchandise Inventory Prepaid Rent Supplies Inventory Plant and Equipment Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Cost of Goods Sold Advertising Expense Insurance Expense Wage Expense Dividends 88,000 178,000 250,000 18,000 75,000 500,000 149,000 104,000 50,000 325,000 501,000 875,000 650,000 30,000 49,000 146,000 20,000 2,004,000 2,004,000 J. Feeney used the following information to prepare adjusting journal entries on December 31, 1997. 1. Depreciation expense in the amount of $60,000 is recorded each year. 2. A physical count of the merchandise inventory indicates that $130,000 is on hand at the end of the year. Chapter 5 The Mechanics of Financial Accounting 251