Accounting Capstone Project -

Adjusting and Closing Entries:

You prepared a few of the regular monthly entries for Ed. Now, Big Ed's Motorcycle Shop is nearing the fiscal year-end.

You have been asked to prepare the adjusting and closing entries to prepare the accounting records for year-end.

Download Big Ed's trial balance to begin preparing your adjusting and closing entries: .Big Ed's Motorcycle Shop Trial Balance Following is the information you will need to make your adjusting entries:

1. Office equipment has a life of five years with no residual value.

2. Store equipment has a life of five years with no residual value.

3.Shop equipment has a life of ten years with no residual value (assume new equipment was purchased Jan. 1. )

4. A physical inventory of Merchandise Inventory, Parts revealed an actual balance of $97,000.

5. A physical inventory of Merchandise Inventory, Motorcycles revealed that the balance was accurate.

6. Office supplies in the amount of $1,500 were used throughout the year.

7. Salaries should be accrued as follows:

a. Sales - $3,000

b. Service - $5,000

c. Office - $1,500

8. Insurance in the amount of $1,200 was used throughout the year.

9. Interest on the Note Payable is 8% (assume new note was taken out on Jan. 1. ) Once you have completed the adjusting entries, prepare your closing entries.