Salaries & Wages of $1,498 are accrued and unpaid at December 31, 2017. Net Inco
ID: 2553966 • Letter: S
Question
Salaries & Wages of $1,498 are accrued and unpaid at December 31, 2017.
Net Income
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PREPARE ADJUSTING JOURNAL ENTRIES
PREPARE INCOME STATEMENT
PREPARE STATEMENT OF S.E
CLOSING ENTRIES
PREPARE A BALANCE SHEET
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.Salaries & Wages of $1,498 are accrued and unpaid at December 31, 2017.
End of Period Worksheet 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 1,181,372Net Income
COMPLETE THE WORKSHEET
PREPARE ADJUSTING JOURNAL ENTRIES
PREPARE INCOME STATEMENT
PREPARE STATEMENT OF S.E
CLOSING ENTRIES
PREPARE A BALANCE SHEET
Explanation / Answer
1/8/2017 Interest on Bank Loan 2753.1 65550*8.4/100*6months/12months To Interest Payable 2753.1 Cash Account Dr 65550 To Bank Loan Account Cr 65550 Prepaid Insurance Account Dr 966 2484*7 months/18 months To Cash Account Cr 966 Prepaid Rent Account Dr 2760 4140*4 months/6 months To Cash Account Cr 2760 2760 Equipment Depriciation Cost - Scrap Value/Useful life in years 86892 12413.14286 Depriciation Account Dr 12413 To Equipment Account Cr 12413 Baddebts Account Dr 8166 To debtors Account Cr 8166 Accrued Salary and Wages Account Dr 1498 To Salary Payable Account Cr 1498 Interest Receivable 2962 92552*6.4/100*6/12 2961.664 Adjusted Trial Balance Opening DR CR Closing Cash 23414 65550 966 87998 Accounts Receivable 92552 0 7715 84837 Interest Receivable 2962 0 2962 Note Receivable 5290 0 0 5290 Merchandise Inventory 66516 0 1830 64686 Prepaid Insurance 2484 0 966 1518 Prepaid Rent 4140 0 2760 1380 Supplies 10488 0 6570 3918 Equipment 94392 0 12413 81979 Accumulated depriciation 0 10212 -10212 Account payabe 0 9669 -9669 Salary and wages payable 0 1498 -1498 Interest payable 0 2753 -2753 Note payable 0 65550 -65550 Common Stock 0 27600 -27600 Retained earnings 0 78200 -55660 Dividends 22540 0 0 22540 Sales 0 989690 -989690 Sales return allowances 5520 0 0 5520 Sale discounts 11868 0 0 11868 Cost of goods sold 681214 0 0 681214 Salaries and wages expenses 149868 0 1498 148370 Utility Expense 11086 0 0 11086 INCOME STATEMENT COST OF GOODS SOLD 681214 SALES 989690 GROSS PROFIT C/D 291088 LESS SALE RETURN 5520 LESS SALE DISCOUNT 11868 972302 972302 972302 Loss in stock 1830 GROSS PROFIT B/F 291088 Insurance 966 Rent 2760 Suppplies 6570 Depriciation 2201 Salary and wages 148370 Utility Expense 11086 Badebts 7715 Net Profit 109590 291088 291088 BALANCE SHEET RETAINED EARNINGS 78200 EQUIPMENT 81979 DIVIDENDS 22540 CASH 87998 ACCOUNTS PAYABLE 9669 ACCOUNTS RECEIBALE 84837 SALARIES AND WAGES PAYABLE 1498 INTEREST RECEIVABLE 2962 INTEREST PAYABLE 2753 MERCHANDISE INVENTORY 64686 NOTE PAYABLE 65550 PREPAID INSURANCE 1518 COMMON STOCK 27600 PREPAID RENT 1380 ACCUMULATED DEPRICIATION 10213 SUPPLIES 3918 NET PROFIT 109590
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