December utilities totaled $1,143 and remain unrecorded at December 31, 2017. Th

Question

December utilities totaled $1,143 and remain unrecorded at December 31, 2017.

The following items should be considered in adjusting the accounts for financial statement preparation: 1. Franklin Products acquired a 8.4% bank loan for $65,550 on August 1, 2017, due in 1 year. 2. Prepaid insurance is the cost of a 18-month insurance policy, effective February 1. 3. Franklin Products rents warehouse storage for its seasonal heavy equipment. On November 1, 2017, Franklin Products paid $4,140 for a 6-month lease. 4. The physical inventory count of Merchandise Inventory indicated an amount $64,686. 5. Supplies on hand at December 31, 2017 total $3,918. 6. Equipment is depreciated on a straight-line basis; residual value is estimated to be $7,500 with an estimated service life of 7 years. The assets were held the entire year. 7. On October 1, Franklin Products issued Evergreen Industries a 6-month note receivable at a 6.4% annual interest rate. 8. The aging schedule of accounts receivable indicates total estimated bad debt will be $8,166. 9. Salaries & Wages of $1,498 are accrued and unpaid at December 31, 2017. 10.

December utilities totaled $1,143 and remain unrecorded at December 31, 2017.

For the Year Ended December 31, 2017 Unadjusted   Adjusted   Account Title Trial Balance   Adjustments   Trial Balance   Income Statement Balance Sheet DR   CR   DR   CR   DR   CR   DR CR DR CR Cash 23,414 Accounts Receivable 92,552 Allowance for Doubtful Accounts 451 Interest Receivable Note Receivable 5,290 Merchandise Inventory 66,516 Prepaid Insurance 2,484 Prepaid Rent 4,140 Supplies 10,488 Equipment 94,392 Accumulated Depreciation - Equipment 10,212 Accounts Payable 9,669 Salaries & Wages Payable Interest Payable Utilities Payable Note Payable (final payment due 2020) 65,550 Common Stock 27,600 Retained Earnings 78,200 Dividends 22,540 Sales 989,690 Sales Returns and Allowances 5,520 Sales Discounts 11,868 Cost of Goods Sold 681,214 Salaries & Wages Expense 149,868 Depreciation Expense - Equipment Bad Debt Expense Insurance Expense Rent Expense Supplies Expense Utilities Expense 11,086 Interest Revenue Interest Expense 1,181,372 1,181,372 Net Income

Explanation / Answer

Unadjusted Trial Balance Adjustments Adjusted Trial Balance Income Summary Balance Sheet Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Cash          23,414.00          23,414.00      23,414.00 Accounts Receivable          92,552.00          92,552.00      92,552.00 Allowance for Doubtful Accounts                451.00        7,715.00            8,166.00        8,166.00 Interest Receivable                         -                84.64                  84.64              84.64 Note Receivable            5,290.00            5,290.00        5,290.00 Merchandise Inventory          66,516.00      64,686.00      66,516.00          64,686.00      64,686.00 Prepaid Insurance            2,484.00        1,518.00                966.00            966.00 Prepaid Rent            4,140.00        1,380.00            2,760.00        2,760.00 Supplies          10,488.00        6,570.00            3,918.00        3,918.00 Equipment          94,392.00          94,392.00      94,392.00 Accumulated Dep. - Equip.          10,212.00      12,413.14          22,625.14      22,625.14 Accounts Payable            9,669.00            9,669.00        9,669.00 Interest Payable                         -          2,294.25            2,294.25        2,294.25 Salaries & Wages Payable                         -          1,498.00            1,498.00        1,498.00 Utilities Payable                         -          1,143.00            1,143.00        1,143.00 Notes Payable (final payment due 2020)          65,550.00          65,550.00      65,550.00 Common Stock          27,600.00          27,600.00      27,600.00 Retained Earnings          78,200.00          78,200.00      78,200.00 Dividends          22,540.00          22,540.00      22,540.00 Sales        989,690.00        989,690.00    989,690.00 Sales Return and Allowances            5,520.00            5,520.00        5,520.00 Sales Discount          11,868.00          11,868.00      11,868.00 Cost of Goods Sold        681,214.00      66,516.00      64,686.00        683,044.00    683,044.00 Salaries & Wages Expense        149,868.00        1,498.00        151,366.00    151,366.00 Depreciation Expense - Equip.                         -        12,413.14          12,413.14      12,413.14 Bad debts Expense                         -          7,715.00            7,715.00        7,715.00 Insurance Exepense                         -          1,518.00            1,518.00        1,518.00 Rent Expense                         -          1,380.00            1,380.00        1,380.00 Supplies Expense                         -          6,570.00            6,570.00        6,570.00 Utilities Expesne          11,086.00        1,143.00          12,229.00      12,229.00 Interest revenue                         -                84.64                  84.64              84.64 Interest Expense                         -          2,294.25            2,294.25        2,294.25                         -                       -   Totals    1,181,372.00    1,181,372.00    165,818.03    165,818.03    1,206,520.03    1,206,520.03    895,917.39    989,774.64    310,602.64    216,745.39 Net Income      93,857.25      93,857.25 Totals    989,774.64    989,774.64    310,602.64    310,602.64

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