GROWN Mysteriously the following account balances are unchanged from the FY 2018
ID: 2522369 • Letter: G
Question
GROWN Mysteriously the following account balances are unchanged from the FY 2018 post-closing trial balance. Prepaid Office Phones Prepaid Rent Prepaid Computer Service Office Supplies Raw Materials Inventory WIP Inventory Finished Goods Inventory 400 $8,000 850 $ 1,400 $41,000 7,675 $134,000 untant provi sig 1. 2. We will need to follow-up with the owner as to why the above account balances were unchanged The company established a line of credit for $200,000 for which there has been no activity (withdrawals to date) G0C-no acounting-enirg reqtu iredfor Anclude Hlz tering ot he 60cn totiotes After discussions with the owner you have learned the following: The unchanged "mystery" account.. . Prepaid office phones - no longer set-up prepaid for office phones..they now expense as incurred. The "prepaid office phones" account is zero. (same applies to the "prepaid computer service" account) ."Prepaid Rent" at year-end was mistakenly not adjusted.at year-end the balance should be $4,50o. . "Office supplies" are no longer tracked, just expense the $1,400. Going forward office supplies will INVENTORY-The owner explained that the inventory counts were completed at 12/31/19 but the count slips had not been added up (this is why they simply left the balances unchanged). The actual simply be expensed as incurred year-end balances were eventually added up. The balances were as follows o Raw Materials-$72,000 O WIP- So o Finished Goods $95,000 neExplanation / Answer
1. Trial Balance:
Notes :
1. Prepaid office exoenses & Prepaid computer expenses write off in profit & loss account as expenses incurred.
2. Prepiad rent expenses written off in profit & loss account is $3500.
3. Office supplies $1400 written off in profit & loss account. And in future dates office supplies will be shown as expenses in profit & loss account.
4. Raw material balance upadted as given.
PARTICULARS AMOUNT IN $ Prepaid Rent 4500 Raw Material 72000 WIP 0 Finished Goods 95000Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.