xcalibur Corporation sells video games for personal computers.
The unadjusted trial balance as of December 31, 2018, appears below. December 31 is the company's fiscal year-end. The company uses the perpetual inventory system.
|
Account Title
|
Debits
|
Credits
|
|
Cash
|
23,300
|
|
|
Accounts receivable
|
32,500
|
|
|
Supplies
|
0
|
|
|
Prepaid rent
|
0
|
|
|
Inventory
|
65,000
|
|
|
Office equipment
|
75,000
|
|
|
Accumulated depreciation-office equipment
|
|
10,000
|
|
Accounts payable
|
|
26,100
|
|
Salaries and wages payable
|
|
3,000
|
|
Note payable
|
|
30,000
|
|
Common stock
|
|
80,000
|
|
Retained earnings
|
|
16,050
|
|
Sales revenue
|
|
180,000
|
|
Cost of goods sold
|
95,000
|
|
|
Interest expense
|
0
|
|
|
Salaries and wages expense
|
32,350
|
|
|
Rent expense
|
14,000
|
|
|
Supplies expense
|
2,000
|
|
|
Utility expense
|
6,000
|
|
|
Totals
|
345,150
|
345,150
|
Cash dividends paid to shareholders during the year amounted to $6,000.
Information necessary to prepare the year-end adjusting entries appears below.
1. The office equipment was purchased in 2016 and is being depreciated using the straight-line method over an eight-year useful life with no salvage value.
2. Accrued salaries and wages at year-end should be $4,500.
3. The company borrowed $30,000 on September 1, 2018. The principal is due to be repaid in 10 years. Interest is payable twice a year on each August 31 and February 28 at an annual rate of 10%.
4. The company debits supplies expense when supplies are purchased. Supplies on hand at year-end cost $500.
5. Prepaid rent at year-end should be $1,000.
1. Complete the worksheet below.
2-a. Use the information in the worksheet to prepare an income statement for 2018.
2-b. Use the information in the worksheet to prepare a statement of shareholders' equity for 2018.
2-c. Use the information in the worksheet to prepare a balance sheet as of December 31, 2018.
3. Prepare the necessary closing entries assuming that adjusting entries have been correctly posted to the accounts.