The Unadjusted Trial Balance has been prepared (provided below and also in Three
ID: 2527151 • Letter: T
Question
The Unadjusted Trial Balance has been prepared (provided below and also in ThreeBrothers worksheet.xlsx), showing only those accounts with a non-zero balance. You have gathered the following information that will be helpful in preparing any necessary adjusting entries (add any accounts necessary). Good luck!
ThreeBrothers
Unadjusted Trial Balance
Dec. 31, 2017
debit
credit
Cash
4,400,000
Accounts Receivable
22,500,000
Allowance for Bad Debts
20,000
Inventory
2,500,000
Purchases
85,832,500
Construction in Progress Inventory
36,000,000
Billings on Contract
35,000,000
PP&E
60,000,000
Accumulated Depreciation
36,000,000
Accounts Payable
18,000,000
Income Tax Payable
136,000
Common Stock
1,500,000
Retained Earnings
33,444,000
Sales Revenue
134,500,000
Sales Returns
2,017,500
NEWPROD Revenue
9,000,000
FITTRACKER Revenue
10,000,000
Cost of NEWPROD Sold
8,100,000
Cost of FITTRACKER Sold
4,500,000
General and Admin
51,750,000
TOTAL
277,600,000
277,600,000
Beyond normal operation:
In addition to its normal operations, in October 2017 ThreeBrothers launched a new service through its website (called NEWPROD on the trial balance worksheet). NEWPROD offers online fitness training through contracted independent trainers. Each trainer sets her own price for a training session. ThreeBrothers connects interested individuals with the trainers but does not directly provide any of the training. For its services and per the contract, ThreeBrothers is entitled to 10% of the total per session fee. ThreeBrothers records the entire fee collected from the session as revenue and recognizes its cost associated with NEWPROD as 90% of the collected fee.
I need the adjusting journal entry and closing journal entry, if necessary. Thank You.
ThreeBrothers
Unadjusted Trial Balance
Dec. 31, 2017
debit
credit
Cash
4,400,000
Accounts Receivable
22,500,000
Allowance for Bad Debts
20,000
Inventory
2,500,000
Purchases
85,832,500
Construction in Progress Inventory
36,000,000
Billings on Contract
35,000,000
PP&E
60,000,000
Accumulated Depreciation
36,000,000
Accounts Payable
18,000,000
Income Tax Payable
136,000
Common Stock
1,500,000
Retained Earnings
33,444,000
Sales Revenue
134,500,000
Sales Returns
2,017,500
NEWPROD Revenue
9,000,000
FITTRACKER Revenue
10,000,000
Cost of NEWPROD Sold
8,100,000
Cost of FITTRACKER Sold
4,500,000
General and Admin
51,750,000
TOTAL
277,600,000
277,600,000
Explanation / Answer
Entries have been posted correctly in General Ledgers
Adjusting Entries:
Newprod Revenue A/c Dr 81,00,000
To Cost of New Prod A/c 81,00,000
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