The following trial balance was taken from the books of Fisk Corporation on December 31, 2007
Account Debit Credit Cash $12,000 Accounts Payable 40,000 Note Receivable 7,000 Allowance for Doubtful Accounts $1,800 Merchandise Inventory 44,000 Prepaid Insurance 4,800 Furniture and Equipment 125,000 Accumulated Depreciation-Furn & Equip 15,000 Accounts Payable 10,800 Common Stock 44,000 Retained Earnings 55,000 Sales 280,000 Cost of Goods Sold 111,000 Salaries Expense 50,000 Rent Expense 12,800 ________ Totals $406,600 $406,600
Income Summary
At year end, the following items have not yet been recorded:
a. Insurance unexpired at year end, $2,000.
b. Depreciation on furniture and equipment, 10% per year
c. Interest at 6% is receivable on the note for one full year
d. Rent paid in advance at December 31, $4,200 (originally charged to expense)
c. Accrued salaries at December 31, $5,800
Instructions
a) Prepare the necessary adjusting entries (omit explanations)
b) Prepare the necessary closing entries (omit explanations)
SOLUTION PREVIEW
a) Prepare the necessary
adjusting entries (omit explanations)
Adjusting
entries:
|
Date
|
Account/description
|
Debit
|
Credit
|
|
Dec 31, 2007
|
Insurance
expense
Prepaid Insurance
|
2,800
|
2,800
|
|
Dec 31, 2007
|
Depreciation
expense
Accumulated depreciation – Furn. &
equip
|
12,500
|
12,500
|
File name: Fisk-Corporation.doc File type: application/msword Price: $4
