The trial balance of Dealer"s Choice Wholesale Company contained the accounts shown at December 31, the end of the company"s fiscal year.
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DEALER"S CHOICE WHOLESALE COMPANY
Trial Balance
December 31, 2012
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Debit
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Credit
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Cash
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$ 31,400
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Accounts Receivable
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37,600
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Inventory
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70,000
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Land
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92,000
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Buildings
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200,000
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Accumulated Depreciation-Buildings
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$ 60,000
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Equipment
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83,500
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Accumulated Depreciation-Equipment
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40,500
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Notes Payable
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54,700
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Accounts Payable
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17,500
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Common Stock
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160,000
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Retained Earnings
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67,200
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Dividends
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10000
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Sales Revenue
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922100
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Sales Discounts
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6,000
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Cost of Goods Sold
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709,900
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Salaries and Wages Expense
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51,300
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Utilities Expense
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11,400
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Maintenance and Repairs Expense
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8,900
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Advertising Expense
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5,200
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Insurance Expense
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4,800
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$1,322,000
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$1,322,000
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Adjustment data:
1. Depreciation is $8,000 on buildings and $7,000 on equipment. (Both are operating expenses.)
2. Interest of $4,500 is due and unpaid on notes payable at December 31.
3. Income tax due and unpaid at December 31 is $24,000.
Other data: $15,000 of the notes payable are payable next year.
Instructions
(a) Journalize the adjusting entries.
(b) Create T accounts for all accounts used in part (a). Enter the trial balance amounts into the T accounts and post the adjusting entries.
(c) Prepare an adjusted trial balance.
(d) Prepare a multiple-step income statement and a retained earnings statement for the year, and a classified balance sheet at December 31, 2012.