Selected amounts from Trent Company\'s trial balance of 12/31/14 appear below: 1
ID: 2417909 • Letter: S
Question
Selected amounts from Trent Company's trial balance of 12/31/14 appear below:
1. Accounts Payable 160,000
2. Accounts Receivable 150,000
3. Accumulated Depreciation—Equipment 200,000
4. Allowance for Doubtful Accounts 20,000
5. Bonds Payable 500,000
6. Cash 150,000
7. Common Stock 60,000
8. Equipment 960,000
9. Prepaid Insurance 30,000
10. Interest Expense 10,000
11. Inventory 300,000
12. Notes Payable (due 6/1/15) 200,000
13. Prepaid Rent 210,000
14. Retained Earnings 818,000
15. Salaries and Wages Expense 328,000
(All of the above accounts have their standard or normal debit or credit balance.)
Part A. Prepare adjusting journal entries at year end, December 31, 2014, based on the following supplemental information.
a. The equipment has a useful life of 15 years with no salvage value. (Straight-line method being used.)
b. Interest accrued on the bonds payable is $15,000 as of 12/31/14.
c. Prepaid insurance at 12/31/14 is $25,000.
d. The rent payment of $180,000 covered the six months from November 30, 2014 through May 31, 2015.
e. Salaries and wages earned but unpaid at 12/31/14, $22,000.
Part B. Indicate the proper balance sheet classification of each of the 15 numbered accounts in the 12/31/14 trial balance before adjustments by placing appropriate numbers after each of the following classifications. If the account title would appear on the income statement, do not put the number in any of the classifications.
a. Current assets
b. Property, plant, and equipment
c. Current liabilities
d. Long-term liabilities
e. Stockholders' equity
Explanation / Answer
Answer (A)
Answer (b)
(a) Account Title & Explanation Debit Credit Depreciation Expense (960000/15) 64000 Accumulated Depreciation - Equipment 64000 (b) Account Title & Explanation Debit Credit Interest Expense 15000 Interest Payable 15000 (c ) Account Title & Explanation Debit Credit Insurance Expense (30000-25000) 5000 Prepaid Insurance 5000 (d) Account Title & Explanation Debit Credit Rent Expense 180000*(1/6) 30000 Prepaid Rent 30000 (e) Account Title & Explanation Debit Credit Salaries Expense 22000 Salaries Payable 22000Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.