Excalibur Corporation sells video games for personal computers. The unadjusted t

Question

Excalibur 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 Cash Accounts receivable Supplies Prepaid rent Inventory Office equipment Accumulated depreciation-office equipment Accounts payable Salaries and wages payable Note payable Common stock Retained earnings Sales revenue Cost of goods sold Interest expense Salaries and wage expense Rent expense Supplies expense Utility expense Totals 88,428 27,000 66,080 83,000 10,790 35,400 4,800 31,280 129,000 19,789 255,000 132,580 53,950 17,600 2,320 6,100 476,890 476,890

Explanation / Answer

Answer 1. EXCALIBUR CORPORATION Work Sheet For Year Ended Dec 31, 2018 Trial Balance Adjustments Adjusted Trial Balance Income Summary Balance Sheet Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Balance Sheet Accounts: Cash      88,420.00      88,420.00      88,420.00 Accounts Receivable      27,000.00      27,000.00      27,000.00 Supplies                     -            580.00            580.00            580.00 Prepaid Rent                     -        1,300.00        1,300.00        1,300.00 Inventory      66,000.00      66,000.00      66,000.00 Office Equipment      83,000.00      83,000.00      83,000.00 Accumulated Dep. - Office Equip.      10,790.00    10,375.00      21,165.00      21,165.00 Accounts Payable      35,400.00      35,400.00      35,400.00 Salaries & Wages Payable        4,800.00      7,200.00      12,000.00      12,000.00 Notes Payable      31,200.00      31,200.00      31,200.00 Interest Payable      1,040.00        1,040.00        1,040.00 Common Stock    120,000.00    120,000.00    120,000.00 Retained Earnings      19,700.00      19,700.00      19,700.00 Sales Revenue    255,000.00    255,000.00    255,000.00 Cost of Goods Sold    132,500.00    132,500.00    132,500.00 Interest Expense                     -        1,040.00        1,040.00        1,040.00 Salaries & Wages Expense      53,950.00      7,200.00      61,150.00      61,150.00 Rent Expense      17,600.00      1,300.00      16,300.00      16,300.00 Supplies Expense        2,320.00          580.00        1,740.00        1,740.00 Utility Expense        6,100.00        6,100.00        6,100.00 Depreciation Expense    10,375.00      10,375.00      10,375.00 Total    476,890.00    476,890.00    20,495.00    20,495.00    495,505.00    495,505.00    229,205.00    255,000.00    266,300.00    240,505.00 Net Income      25,795.00                     -                       -        25,795.00 Totals    255,000.00    255,000.00    266,300.00    266,300.00                     -                     -                       -   Depreciation Expense = $83,000 / 8 Years = $10,375 Interest Expense = $31,200 X 10% X 4/12 = $1,040                     -                       -   Answer 2a. EXCALIBUR CORPORATION Income Statement For Year Ended Dec 31, 2018 Sales Revenue    255,000.00 Cost of Goods Sold    132,500.00 Gross Margin    122,500.00 Expenses Salaries & Wages Expense      61,150.00 Rent Expense      16,300.00 Supplies Expense        1,740.00 Utility Expense        6,100.00 Depreciation Expense      10,375.00      95,665.00 Net Operating Income      26,835.00 Interest Expense        1,040.00 Net Income      25,795.00 Answer 2b. EXCALIBUR CORPORATION Statement of Shareholders' Equity Common Stock Retained Earnings Total Balance at Jan 1, 2018    120,000.00      28,700.00    148,700.00 Net Income                     -        25,795.00      25,795.00 Cash Dividends                     -        (9,000.00)      (9,000.00) Total    120,000.00      45,495.00    165,495.00 Answer 2c. EXCALIBUR CORPORATION Balance Sheet As on Dec 31, 2018 Assets Current Assets Cash      88,420.00 Accounts Receivable      27,000.00 Supplies            580.00 Prepaid Rent        1,300.00 Inventory      66,000.00    183,300.00 Property, Plant & Equipment Office Equipment      83,000.00 Accumulated Dep. - Office Equip.    (21,165.00)      61,835.00 Total Assets    245,135.00 Liabilities & Stockholders' Equity Liabilities Current Liabilities Accounts Payable      35,400.00 Salaries & Wages Payable      12,000.00 Interest Payable        1,040.00      48,440.00 Long Term Liabilities Notes Payable      31,200.00 Total Liabilities      79,640.00 Total Stockholders' Equity    165,495.00 Total Liabilities & Stockholders' Equity    245,135.00 Answer 3. Closing Journal Entry Date Particulars Dr. Amt. Cr. Amt. 31-Dec-17 Sales Revenue    255,000.00    Income Summary    255,000.00 (To record the close of revenue accounts) 31-Dec-17 Income Summary      96,705.00 Interest Expense        1,040.00    Salaries & Wages Expense      61,150.00    Rent Expense      16,300.00    Supplies Expense        1,740.00    Utility Expense        6,100.00    Depreciation Expense      10,375.00 (To record the close of expense accounts) 31-Dec-17 Income Summary      25,795.00 Retained Earnings      25,795.00 (To record the net income)

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

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