The trial balance of Winsor Corporation is reproduced on the following page. The
ID: 2493635 • Letter: T
Question
The trial balance of Winsor Corporation is reproduced on the following page. The information below is relevant to the preparation of adjusting entries needed to both properly match revenues and expenses for the period and reflect the proper balances in the real and nominal accounts. Instructions As the accountant for Winsor Corporation, you are to prepare adjusting entries based on the following data, entering the adjustments on the work sheet and completing the additional columns with respect to the income statement and balance sheet. Carefully key your adjustments and label all items. (Due to time constraints, an adjusted trial balance is not required.) Round all computations to the nearest dollar. (a) Winsor determined that one percent of sales will become uncollectible. (b) Depreciation is computed using the straight-line method, with a ten-year life and $5,000 salvage value. (c) Salesmen are paid commissions of 15% of sales. Commissions on sales for December have not been paid. (d) The note was issued on October 1, bearing interest at 8%, due Feb. 1, 2018. (e) A physical inventory of supplies indicated $440 of supplies currently in stock. (f) Provisions of a lease contract specify payments must be made one month in advance, with monthly payments at $800/mo. This provision has been complied with as of Dec. 31, 2017. Winsor Corporation Work Sheet For the Year Ended December 31, 2017 Trial Balance Adjustments Income Statement Balance Sheet Accounts Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Cash 12,400 Equity Invest. 14,050 Accounts Rec. 30,000 Allow. for D. A. 420 Inventory 16,800 Supplies 1,040 Equipment 65,000 Accum. Depr.-Equip. 9,500 Accounts Payable 4,400 Notes Payable 10,000 Common Stock 40,000 Ret. Earnings 29,690 Sales Revenue 360,000 Cost of Goods Sold 245,520 Salaries and Wages Exp. 20,800 Sales Comm. Exp. 39,000 Rent Expense 7,200 Misc. Expense 2,200 Totals 454,010 454,010Explanation / Answer
Balance Sheet as on December 31, 2017 :
Income Statement For the Year Ended December 31, 2017 :
Less: Expenses:
Liabilities and Share Capital Amount $ Assets Amount $ Accounts Payable 4400 Cash 12400 Notes Payable 10000 Equity Investment 14050 Allow. for D. A. 4020 Accounts Receivable 30000 Commission Payable 15000 Inventory 16800 Interest Payable 200 Supplies 440 Accum. Depr.-Equip. 15500 Equipemnt 65000 Common Stock 40000 Retained Earnings(29690+19880) 49570 Total 138690 Total 138690Related Questions
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