The Green Thumb Gardener is a retail store that sells plants, soil, and decorati
ID: 2545226 • Letter: T
Question
The Green Thumb Gardener is a retail store that sells plants, soil, and decorative pots. On December 31, 2019, the firm's general ledger contained the accounts and balances that appear below.
ACCOUNTS AND BALANCES
Uncollectible Accounts Expense
ADJUSTMENTS
a.–b. Merchandise inventory on December 31, 2019, is $11,921.
During 2019, the firm had net credit sales of $31,000; the firm estimates that 0.7 percent of these sales will result in uncollectible accounts.
On December 31, 2019, an inventory of the supplies showed that items costing $255 were on hand.
On October 1, 2019, the firm signed a six-month advertising contract for $900 with a local newspaper and paid the full amount in advance.
On January 2, 2018, the firm purchased store equipment for $7,860. At that time, the equipment was estimated to have a useful life of five years and a salvage value of $560.
On January 2, 2018, the firm purchased office equipment for $1,360. At that time, the equipment was estimated to have a useful life of five years and a salvage value of $160.
On December 31, 2019, the firm owed salaries of $1,790 that will not be paid until 2020.
On December 31, 2019, the firm owed the employer’s social security tax (assume 6.2 percent) and Medicare tax (assume 1.45 percent) on the entire $1,790 of accrued wages.
On December 31, 2019, the firm owed federal unemployment tax (assume 0.6 percent) and state unemployment tax (assume 5.4 percent) on the entire $1,790 of accrued wages.
Required:
Prepare the Trial Balance section of a 10-column worksheet. The worksheet covers the year ended December 31, 2019.
Enter the adjustments above in the Adjustments section of the worksheet.
Complete the worksheet.
Analyze:
By what amount were the assets of the business affected by adjustments?
The Green Thumb Gardener is a retail store that sells plants, soil, and decorative pots. On December 31, 2019, the firm's general ledger contained the accounts and balances that appear below.
ACCOUNTS AND BALANCES
Cash $ 5,300 Dr. Accounts Receivable 2,200 Dr. Allowance for Doubtful Accounts 48 Cr. Merchandise Inventory 10,900 Dr. Supplies 1,160 Dr. Prepaid Advertising 900 Dr. Store Equipment 7,860 Dr. Accumulated Depreciation—Store Equipment 1,460 Cr. Office Equipment 1,360 Dr. Accumulated Depreciation—Office Equipment 240 Cr. Accounts Payable 2,585 Cr. Social Security Tax Payable 390 Cr. Medicare Tax Payable 84 Cr. Federal Unemployment Tax Payable State Unemployment Tax Payable Salaries Payable Beth Argo, Capital 23,375 Cr. Beth Argo, Drawing 19,600 Dr. Sales 88,048 Cr. Sales Returns and Allowances 1,060 Dr. Purchases 45,200 Dr. Purchases Returns and Allowances 390 Cr. Rent Expense 5,600 Dr. Telephone Expense 550 Dr. Salaries Expense 13,700 Dr. Payroll Taxes Expense 1,230 Dr. Income Summary Supplies Expense Advertising Expense Depreciation Expense—Store Equipment Depreciation Expense—Office EquipmentUncollectible Accounts Expense
ADJUSTMENTS
a.–b. Merchandise inventory on December 31, 2019, is $11,921.
During 2019, the firm had net credit sales of $31,000; the firm estimates that 0.7 percent of these sales will result in uncollectible accounts.
On December 31, 2019, an inventory of the supplies showed that items costing $255 were on hand.
On October 1, 2019, the firm signed a six-month advertising contract for $900 with a local newspaper and paid the full amount in advance.
On January 2, 2018, the firm purchased store equipment for $7,860. At that time, the equipment was estimated to have a useful life of five years and a salvage value of $560.
On January 2, 2018, the firm purchased office equipment for $1,360. At that time, the equipment was estimated to have a useful life of five years and a salvage value of $160.
On December 31, 2019, the firm owed salaries of $1,790 that will not be paid until 2020.
On December 31, 2019, the firm owed the employer’s social security tax (assume 6.2 percent) and Medicare tax (assume 1.45 percent) on the entire $1,790 of accrued wages.
On December 31, 2019, the firm owed federal unemployment tax (assume 0.6 percent) and state unemployment tax (assume 5.4 percent) on the entire $1,790 of accrued wages.
Required:
Prepare the Trial Balance section of a 10-column worksheet. The worksheet covers the year ended December 31, 2019.
Enter the adjustments above in the Adjustments section of the worksheet.
Complete the worksheet.
Analyze:
By what amount were the assets of the business affected by adjustments?
Explanation / Answer
Trial Balance Adjustments Adjusted Trial Balance Income Summary Balance Sheet Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Balance Sheet Accounts: Cash 5,300.00 5,300.00 5,300.00 Accounts Receivable 2,200.00 2,200.00 2,200.00 Allowance for Doubtful Accounts 48.00 217.00 265.00 265.00 Merchandise Inventory 10,900.00 1,021.00 11,921.00 11,921.00 Supplies 1,160.00 - 905.00 255.00 255.00 Prepaid Advertising 900.00 450.00 450.00 450.00 Store Equipment 7,860.00 7,860.00 7,860.00 Accumulated Dep. - Store Equip. 1,460.00 1,460.00 2,920.00 2,920.00 Office Equipment 1,360.00 1,360.00 1,360.00 Accumulated Dep. - Office Equip. 240.00 240.00 480.00 480.00 Accounts Payable 2,585.00 2,585.00 2,585.00 Social Security Tax Payable 390.00 110.98 500.98 500.98 Medicare Tax Payable 84.00 25.96 109.96 109.96 Federal Unemployment Tax Payable - 10.74 10.74 10.74 State Unemployment Tax Payable - 96.66 96.66 96.66 Salaries Payable - 1,790.00 1,790.00 1,790.00 Beth Agro, Capital 23,375.00 23,375.00 23,375.00 Beth Agro, Drawings 19,600.00 19,600.00 19,600.00 Income Statement Accounts Sales 88,048.00 88,048.00 88,048.00 Sales Return & Allowances 1,060.00 1,060.00 1,060.00 Purchases 45,200.00 45,200.00 45,200.00 Purchase Return & Allowances 390.00 390.00 390.00 Rent Expense 5,600.00 5,600.00 5,600.00 Telephone Expense 550.00 550.00 550.00 Salaries Expense 13,700.00 1,790.00 15,490.00 15,490.00 Payroll Taxes Expense 1,230.00 244.34 1,474.34 1,474.34 Supplies Expense - 905.00 905.00 905.00 Income Summary - 1,021.00 1,021.00 1,021.00 Advertising Expense - 450.00 450.00 450.00 Depreciation Expense - Store Equip. - 1,460.00 1,460.00 1,460.00 Depreciation Expense - Office Equip. - 240.00 240.00 240.00 Uncollectible Accounts Expense - 217.00 217.00 217.00 Totals 116,620.00 116,620.00 6,327.34 6,327.34 121,592.34 121,592.34 72,646.34 89,459.00 48,946.00 32,133.34 Net Income - - - - 16,812.67 16,812.67 Totals 116,620.00 116,620.00 6,327.34 6,327.34 121,592.34 121,592.34 89,459.00 89,459.00 48,946.00 48,946.00
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.