Baltimore Glass Company Trial Balance December 31, 2015 Acct No. Account Title D

Question

Baltimore Glass Company
Trial Balance
December 31, 2015

Acct No.    Account Title                              Debit         Credit
101            Cash                                          88,450      
110            Accounts Receivable               195,613
120            Merchandise Inventory            256,250
125            Supplies on Hand                       3,252
130            Prepaid Insurance                       3,500
131            Prepaid Rent                               7,500
150            Equipment                               175,285
160            Accumulated Depreciation                            24,260
202            Accounts Payable                                         72,555
210            Wages Payable                                                  -
301            Capital Stock                                               220,000
302            Retained Earnings, January 1                     211,144
401            Sales                                                            998,250
405            Sales Returns and Allowances    5,145
410            Interest Income                                                1,500
500            Purchases                                 560,880
501            Purchases Discounts                                       4,080
502            Purchases Returns and Allowances                1,200
505            Freight In                                       4,580
520            Advertising Expense                      1,000
530            Sales Salaries Expense               88,600
532            Supplies Expense                             -
540            Office Salaries Expense             124,500
550            Utilities Expense                             8,594
555             Insurance Expense                           -
560            Professional Fees Expense            3,000
570            Depreciation Expense                         -
580            Interest Expense                             6,840
                                                                   1,532,989         1,532,989
Adjusting items:
1. The remaining prepaid insurance at year end is $3,000
2. A physical inventory shows supplies on hand of $2,000 at year end
3. The prepaid rent of $7,500 covers January 2016 rent
4. Depreciation on equipment is $12,000 for the year
5. At year end sales salaries of $3,000 were earned but unpaid
6. At year end office salaries of $4,000 were earned but unpaid
7. Inventory items with a cost of $35,400 were received on the last day of the year but no invoice was received yet
8. A physical count of inventory shows a value of $219,100. The periodic inventory method is used.

Prepare closing journal entries

Explanation / Answer

JOURNAL ENTRIES

Date Point No JOURNAL ENTRIES Debit ($) Credit ($) 31-Dec a Insurance                      500 To Pre paid Insurance                   500 31-Dec b Provision for Inventories                    1,252 To Inventories                1,252 31-Dec c Depreciation Dr                  12,000 To Accumulated Depreciation              12,000 31-Dec d Sales Salaries Dr                    3,000 To Salaries Payable                3,000 31-Dec f Merchandise Inventories Dr                  35,400 To GR/IR account              35,400 31-Dec g Interest   Dr                    2,100 To Interest Payable                2,100 31-Dec h Provision for Inventories                  72,550 To Inventories              72,550 (256250+35400-219100)=72,550

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