Presented below is the December 30 Trial balance of Cassini Studios. Debit Credi
ID: 2450640 • Letter: P
Question
Presented below is the December 30 Trial balance of Cassini Studios.
Debit Credit
Cash................................................. $14,800
Accounts Receivable....................... 33,600
Allownance for Doubtful Accounts........ $2,160 credit
Inventory, January 1.............................. 62,400
Furniture and Equipment....................... 67,200
Accumulated Depreciation -- Furniture
& Equipment........................................... $26,880 credit
Prepaid Insurance................................... $4,080
Notes Payable 12% interest rate............. $22,400 credit
Paul Jones, Capital 12/29........................ $72,000 credit
Sales ....................................................... $480,000 credit
Purchases ............................................... $320,000
Sales Salaries Expense.......................... $40,000
Advertising Expense .............................. $5,360
Administrative Salaries Expense ............. $52,000
Office Expense ........................................ $4,000
(1) Prepare adjusting entries for the following items:
(a) Adjust the Allownace for Doubtful Accounts to 8 percent of the accounts receivable. Remember there si a $2160 balance in the Allowance account.
(b) Furniture and equipment is depreciated at 20 percent per year.
(c) Insurance expired during the year, $2040.
(d) 12% interest for one year has been accrued to notes payable, ($22,400*12%).
(e) Salaries earne for the last two days in December, but not paid, $1920
(f) January 15, 2014 advertising has been paid in advance, $560.
(g) Office supplies on hand, $1200, charged to Office Expense when purchased.
(2) Prepare closing entries for Cassini after the above adjusting entries have been made. Additional information shows the inventory on December 31, was $64,000. You can summarize the revenues and expenses and close them directly to Income Summary and then close Income Summary into Paul Jones Capital account.
(3) Prepare a post-closing trial balance for Cassini on December 31.
Cassini Studios
Trial Balance
December 31, 2012
Debit Credit
Cash..........................................................
Accounts Receivable ...............................
Allowances for Doubtful Accounts...........
Inventory, December 31.........................
Furniture and Equipment........................
Accumulated Depreciation-- Furniture an Equipment
Prepaid Insurance...............................
Notes Payable.........................................
Paul Jones, Capital on 12/31...................
Sales .....................................................
Purchases ...............................................
Sales Salaries Expense ..........................
Advertising Expense ................................
Salaries Payable .....................................
Office Expense ........................................
Interest Payable ........................................
Office Supplies ..........................................
Other .........................................................
$________ $_________
Explanation / Answer
Presented below is the December 30 Trial balance of Cassini Studios. Debit Credi
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