The Green Thumb Gardener is a retail store that sells plants, soil, and decorati

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The Green Thumb Gardener is a retail store that sells plants, soil, and decorative pots. On December 31, 2019, the firm's general ledger contained the accounts and balances that appear below. ACCOUNTS AND BALANCES Cash $ 6,200 Dr. Accounts Receivable 3,100 Dr. Allowance for Doubtful Accounts 57 Cr. Merchandise Inventory 11,800 Dr. Supplies 1,250 Dr. Prepaid Advertising 900 Dr. Store Equipment 8,400 Dr. Accumulated Depreciation—Store Equipment 1,550 Cr. Office Equipment 1,900 Dr. Accumulated Depreciation—Office Equipment 330 Cr. Accounts Payable 2,675 Cr. Social Security Tax Payable 480 Cr. Medicare Tax Payable 93 Cr. Federal Unemployment Tax Payable State Unemployment Tax Payable Salaries Payable Beth Argo, Capital 27,947 Cr. Beth Argo, Drawing 20,500 Dr. Sales 92,548 Cr. Sales Returns and Allowances 1,150 Dr. Purchases 47,900 Dr. Purchases Returns and Allowances 480 Cr. Rent Expense 6,500 Dr. Telephone Expense 640 Dr. Salaries Expense 14,600 Dr. Payroll Taxes Expense 1,320 Dr. Income Summary Supplies Expense Advertising Expense Depreciation Expense—Store Equipment Depreciation Expense—Office Equipment Uncollectible Accounts Expense ADJUSTMENTS a.–b. Merchandise inventory on December 31, 2019, is $12,821. During 2019, the firm had net credit sales of $40,000; the firm estimates that 0.7 percent of these sales will result in uncollectible accounts. On December 31, 2019, an inventory of the supplies showed that items costing $300 were on hand. On October 1, 2019, the firm signed a six-month advertising contract for $900 with a local newspaper and paid the full amount in advance. On January 2, 2018, the firm purchased store equipment for $8,400. At that time, the equipment was estimated to have a useful life of five years and a salvage value of $650. On January 2, 2018, the firm purchased office equipment for $1,900. At that time, the equipment was estimated to have a useful life of five years and a salvage value of $250. On December 31, 2019, the firm owed salaries of $1,880 that will not be paid until 2020. On December 31, 2019, the firm owed the employer’s social security tax (assume 6.2 percent) and Medicare tax (assume 1.45 percent) on the entire $1,880 of accrued wages. On December 31, 2019, the firm owed federal unemployment tax (assume 0.6 percent) and state unemployment tax (assume 5.4 percent) on the entire $1,880 of accrued wages. Required: Prepare the Trial Balance section of a 10-column worksheet. The worksheet covers the year ended December 31, 2019. Enter the adjustments above in the Adjustments section of the worksheet. Complete the worksheet. Analyze: By what amount were the assets of the business affected by adjustments?

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Adjusting entries Adjusted Trial Balance Income statement Balance Sheet Unadjusted Trial Balance Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Cash $6,200 $6,200 $6,200 Accounts Receivable 3,100 $3,100 $3,100 Allowance for Doubtful Accounts 57 280 b) 337 337 Merchandise Inventory 11,800 12,821 11800 $12,821 $12,821 Supplies 1,250 950 $300 $300 Prepaid Advertising 900 450 d $450 $450 Store Equipment 8,400 $8,400 $8,400 Accumulated Depreciation—Store Equipment 1,550 1550 e 3100 3100 Office Equipment 1,900 $1,900 $1,900 Accumulated Depreciation—Office Equipment 330 330 f 660 660 Accounts Payable 2,675 2675 2675 Social Security Tax Payable 480 116.56 h 596.56 596.56 Medicare Tax Payable 93 27.26 h 120.26 120.26 Federal Unemployment Tax Payable 11.28 h 11.28 11.28 State Unemployment Tax Payable 101.52 h 101.52 101.52 Salaries Payable 1880 g 1880 1880 Beth Argo, Capital 27,947 27947 $23,689 Beth Argo, Drawing 20,500 $20,500 (27947-20500+16242) Sales 92,548 92548 92548 Sales Returns and Allowances 1,150 $1,150 $1,150 Purchases 47,900 47900 A $0 Purchases Returns and Allowances 480 480 A 0 Rent Expense 6,500 $6,500 $6,500 Telephone Expense 640 $640 $640 Salaries Expense 14,600 1880 g $16,480 $16,480 Payroll Taxes Expense 1,320 256.62 h $1,577 $1,577 Income Summary 46,399 a $46,399 0 $46,399 Supplies Expense 950 c) $950 $950 (1250-300) Advertising Expense 450 d $450 $450 (900/6*3) Depreciation Expense—Store Equipment 1550 e $1,550 $1,550 (8400-650)/5 Depreciation Expense—Office Equipment 330 f $330 $330 (1900-250)/5 Uncollectible Accounts Expense 280 b) $280 $280 (40000*.7%) Total $126,160 $126,160 $65,397 $65,397 $129,977 $129,977 $76,306 $92,548 $33,171 $33,171 Net income $16,242 $92,548 working a) Cost of good sold=11800+47900-480-12821 46399 g) Salaries Rate Amt Social Security Tax Payable 1880 6.20% 116.56 Medicare Tax Payable 1880 1.45% 27.26 Federal Unemployment Tax Payable 1880 0.60% 11.28 State Unemployment Tax Payable 1880 5.40% 101.52 ANS 2 Total assets will increase by (129977-126160) $3,817

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