The unadjusted trial balance for Mitchell Pharmacy appears below. The following information is available at year-end for
Question:
The unadjusted trial balance for Mitchell Pharmacy appears below.
The following information is available at year-end for adjustments:
a. An analysis of insurance policies indicates that $1,400 of the prepaid insurance is coverage for 2010.
b. Depreciation expense for 2009 is $8,800.
c. Four months' interest at 8 percent is owed but unrecorded and unpaid on the note payable.
d. Wages of $4,410 are owed but unpaid and unrecorded at December 31.
e. Income taxes expense, computed at 30 percent of income before taxes, is owed but unrecorded and unpaid at December 31.
Required:
1. Prepare the adjusting entries.
2. Prepare an income statement, a statement of changes in retained earnings, and a balance sheet using adjusted account balances.
3. Why would you not want to prepare financial statements until after the adjusting entries aremade?
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
Cornerstones of Financial and Managerial Accounting
ISBN: 978-0324787351
1st Edition
Authors: Rich Jones, Mowen, Hansen, Heitger