Required information [The following information applies to the questions display

Question

Required information [The following information applies to the questions displayed below.] Pastina Company sells various types of pasta to grocery chains as private label brands. The company's fiscal year-end is December 31. The unadjusted trial balance as of December 31, 2018, appears below Debits Credits Account Title Cash Accounts receivable Supplies Inventory Note receivable Interest receivable Prepaid rent Prepaid insurance Office equipment Accumulated depreciation-office equipment Accounts payable Salaries and wages payable Note payable Interest payable Deferred revenue Common stock Retained earnings Sales revenue Interest revenue Cost of goods sold Salaries and wages expense Rent expense Depreciation expense Interest expense Supplies expense Insurance expense Advertising expense Totals 38,500 50,000 1,450 70,000 23,100 1,900 78,000 29,250 29,000 53,100 60,000 19,500 198,000 89,100 17,700 10,450 950 4,800 2.,900 388,850 388,850 Information necessary to prepare the year-end adjusting entries appears below

Explanation / Answer

SALES REVENUE

PASTINA COMPANY INCOME STATEMENT FOR THE YEAR ENDING DEC 31,2018 REFER WORKING NOTE AT THE END AMOUNT($)

SALES REVENUE

(198000-1500) 196500 COST OF GOODS SOLD 89100 GROSS PROFIT 107400 OPERATING EXPENSES SALARIES AND WAGES (17700+1250) 18950 RENT (10450+950) 11400 DEPRECIATION 9750 SUPPLIES (950+680) 1630 INSURANCE (4800-3000) 1800 ADVERTISING 2900 TOTAL OPERATING EXPENSES 46430 OPERATING INCOME 60970 OTHER INCOME(EXPENSE) INTEREST REVENUE 1540 INTEREST EXPENSE -1593 NET INCOME 60917 STATEMENT OF SHAREHOLDER EQUITY FOR YEAR ENDED 31 DEC 2018 COMMON STOCK RETAINED EARNINGS TOTAL SHAREHOLDER EQUITY BALANCE AT 1 JAN 2018 $                                                            60,000 19500 $     79,500 ISSUE OF COMMON STOCK 0 0 0 NET INCOME FOR 2018 60917 60917 LESS DIVIDEND 0 0 0 BALANCE AT 31 DEC 2018 $                                                            60,000 $                          80,417 $ 140,417 BALANCE SHEET AS AT 31 DEC 2018 ASSETS AMONT($) CURRENT ASSETS CASH 38500 ACCOUNT RECEIVABLE 50000 SUPPLIES (1450-680) 770 INVENTORY 70000 NOTE RECEIVABLE 23100 INTEREST RECEIVABLE 1540 PREPAID RENT (1900-950) 950 PREPAID INSURANCE 3000 TOTAL CURRENT ASSETS 187860 OFFICE EQUIPMENT 78000 LESS:ACCUMULATED DEPRECIATION (29250+9750)=39000 39000 TOTAL ASSETS $                        226,860 LIABILITIES AND SHAREHOLDER EQUITY CURRENT LIABILITIES ACCOUNT PAYABLE 29000 SALARIES AND WAGES PAYABLE 1250 NOTE PAYABLE 53100 INTEREST PAYABLE 1593 DEFERRED REVENUE 1500 TOTAL CURRENT LIABILITIES 86443 SHAREHOLDER EQUITY COMMON STOCK 60000 RETAINED EARNINGS $                                                            80,417 TOTAL SHAREHOLDER EQUITY $                        140,417 TOTAL LIABILITY AND SHAREHOLDER EQUITY $                        226,860 WORKING NOTES 1 ADJUSTING ENTRIES TRANSACTION GENERAL JOURNAL DEBIT ($) CREDIT($) 1 DEPRECIATION…DR 9750 TO ACCUMULATED DEPRECIATION 9750 2 WAGES EXPENSE 1250 TO WAGES PAYABLE 1250 3 INTEREST EXPENSE 1593 TO INTEREST PAYABLE 1593 4 INTEREST RECEIVABLE 1540 TO INTEREST REVENUE 1540 5 PREPAID INSURANCE 3000 TO INSURANCE EXPENSE 3000 6 SUPPLIES EXPENSE 680 TO SUPPLIES 680 7 SALES REVENUE 1500 TO DEFERRED REVENUE 1500 8 RENT EXPENSE 950 TO PREPAID RENT 950 Interest expense ($53,100 × 12% × 3/12) =$1593 Interest receivable ($23,100 × 8% × 10/12) = $1540 Prepaid insurance ($4,800 × 15/24) = $3,000 Supplies expense ($1,450 ? $770) = $680

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.