P3-11 Worksheet The Fiorillo Company has the following account balances on Decem
ID: 2346635 • Letter: P
Question
P3-11 Worksheet The Fiorillo Company has the following account balances on December 31, 2010 prior to any adjustments:Debit Credit
Cash $ 1,900
Accounts receivable 4,700
Allowance for doubtful accounts $ 60
Inventory 8,700
Prepaid insurance 600
Land 4,100
Buildings 38,000
Accumulated depreciation:
buildings 11,500
Equipment 10,700
Debit Credit
Accumulated depreciation:
equipment 3,100
Accounts payable 4,300
Notes payable (due March 1, 2011) 1,400
Unearned rent 1,200
Mortgage payable (due
January 1, 2015) 7,300
Capital stock (2,000 shares) 10,000
Retained earnings (January 1, 2010) 18,075
Dividends distributed 1,300
Sales revenue 49,355
Cost of goods sold 27,185
Salaries expense 4,080
Utilities expense 2,000
Office supplies expense 770
Delivery expense 1,275
Other expenses 980
Additional adjustment information: (a) depreciation on buildings, $1,100; on equipment, $600; (b) bad debts expense, $240;
(c) interest accumulated but not paid: on note payable, $50; on mortgage payable, $530 (this interest is due during the next
accounting period); (d) insurance expired, $175; (e) salaries accrued but not paid $370; (f) rent that was collected in advance
and is now earned at year-end, $800; (g) office supplies on hand at year-end, $230 (expensed when originally purchased earlier
in the year); and (h) the income tax rate is 30% on current income and is payable in the first quarter of 2011.
Required
1. Transfer the account balances to a 10-column worksheet and prepare a trial balance.
2. Complete the worksheet.
3. Prepare the company
Explanation / Answer
adjusting entries:
a.
Debit: Depreciation expense, building 1100
Credit: Accumulated depreciation, building 1100
Debit: Depreciation expense, equipment 600
Credit: Accumulated depreciation, equipment 600
b.
Debit: Bad debts expense 240
Credit: Allowance for uncollectible accounts 240
c.
debit: Interet expense 50
credit: Interest payable 50
debit: Interest expense 530
credit: interest payable 530
d.
debit: insurance expnese 175
credit: prepaid insurane 175
e.
Debit: Salaries expnese 370
Credit: Salaries payable 370
f.
Debit: Unearned rent 800
Credit: Rent revenue 800
g.
Debit: Office supplies 230
Credit: Office suppies expense 230
h.
debit: income tax expense 3309
credit: income tax payable 3309
closing entries:
Debit: Sales revenue 49355
Debit: Rent revenue 800
Credit: Income summary 50155
Debit: Income summary 42,434
Credit: Cost of goods sold 27185
Credit: salaries expense 4450
credit: Utilities expense 2000
Credit: Office supplies exspense 540
Credit: Delivery expense 1275
credit: other expenses 980
credit: Depreciation expense buiding 1100
Credit: Depreciation expense equipment 600
credit: bad debt expense 240
Credit: interest expense 580
Credit: insurance expense 175
Credit: Incoeme tax expense 3309
Debit: Income summary 7721
Credit: retained earnings 7721
Excel worksheet to figure out income tax expense:
revenue
expense
sales revenue
49355
cost of goods sold
27185
rent
800
salaries
4080
50155
utilities
2000
office supplies
770
delivery
1275
other
980
depreciation
1100
depreciation
600
bad debts
240
interest
50
interest
530
insurance
175
salaries
370
office supplies
-230
39125
revenue
50155
less expense
39125
11030
income tax
3309
(11030*.3)
revenue
expense
sales revenue
49355
cost of goods sold
27185
rent
800
salaries
4080
50155
utilities
2000
office supplies
770
delivery
1275
other
980
depreciation
1100
depreciation
600
bad debts
240
interest
50
interest
530
insurance
175
salaries
370
office supplies
-230
39125
revenue
50155
less expense
39125
11030
income tax
3309
(11030*.3)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.