The unadjusted trial balance of Chicken Express for fiscal 2014, includes the fo

ID: 2416305 • Letter: T

Question

The unadjusted trial balance of Chicken Express for fiscal 2014, includes the following items:

Debit

Credit

Inventory

$95,600

Wages payable

$1,600

Prepaid insurance

7,600

Taxes payable

Your analysis reveals additional information as follows:

The cost of inventory items on hand is $46,400.

Employee wages for the two weeks prior to year end were $15,600 and these will not be paid until the 2015 fiscal year (no other wages are owed).

The unexpired portion of the company’s insurance policy at year end was $9,200.

The company’s tax accountant reports that the company will owe $108,000 for income taxes for fiscal 2014.

Prepare journal entries for any required accounting adjustments.

Debit

Credit

Inventory

$95,600

Wages payable

$1,600

Prepaid insurance

7,600

Taxes payable

To inventory A/C 49200

(For inventory actual value adjusted)

To Wages payable A/C 14000

(For additional outstanding wages )

To Insurance A/C 1600

(For additional prepaid insurance)

To Income tax payable A/C 108000

(For income tax accrued)

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