Problem
Salem trading company unadjusted trial balance Dec 31, 2016
|
Debit
|
Credit
|
|
Cash
|
$25,500
|
|
|
Accounts Receivable
|
40,000
|
|
|
Allowance for Doubtful Accounts
|
|
700
|
|
Inventory, Dec 31
|
80,000
|
|
|
Prepaid Insurance
|
5,100
|
|
|
Prepaid Supplies
|
5,000
|
|
|
Equipment
|
84,000
|
|
|
Accumulated Depretiation - Equipment
|
|
35,000
|
|
Notes Payable
|
|
35,000
|
|
Common Stock
|
|
80,600
|
|
Retained Earnings
|
|
10,000
|
|
Sales Revenue
|
|
608,000
|
|
Cost Of Good Sold
|
408,000
|
|
|
Salaries and Wages Expense (sales)
|
50,000
|
|
|
Advertising Expense
|
6,700
|
|
|
Salaries and Wages Expense (administrative)
|
65,000
|
|
1. Bad debt expense is estimated to be $1680
2. Equipment is depreciated based on a 7-year life (no salvage value)
3. nshurance expired during the year $2975
4. Interest accrued on notes payable $2360
5. Sales salaries and wages earned but not paid $3000
6. Office supplies on hand $2000
a) Construct T-accounts and enter the balances shown
b) Prepare adjusting journal entries for the following and post to the T-accounts. (Omit Explanations)
Open Additional T-accounts as necessary. ( The bookes are closed yearly on December 31.)
c) Prepare an adjusted trial balance
d) Prepare an income statement for 2016 and a balance sheet as of December 31, 2016
e) Prepare and post closing entries
f) Prepare a post-closing trial balance.