Below you will see an unadjusted trial balance run at month end followed by information needed to make adjusting entries.
Baltimore Glass Company
Unadjusted Trial Balance
January 31, 2017
Acct.
No.	Account Title	Debit	Credit
101	Cash	34,512
110	Accounts Receivable	182,610
120	Merchandise Inventory	573,987
125	Supplies on Hand	3,252
130	Prepaid Insurance	6,000
131	Prepaid Rent	7,500
150	Equipment	270,000
160	Accumulated Depreciation		90,000
202	Accounts Payable		110,587
210	Salaries Payable		–
215	Interest Payable		–
220	Current Portion of Long Term Debt		12,000
240	Long Term Debt		120,000
301	Capital Stock		220,000
302	Retained Earnings, 12/31/16		211,144
401	Sales		348,080
510	Cost of Goods Sold	–
520	Advertising Expense	1,000
530	Sales Salaries Expense	18,600
531	Sales Commission Expense	–
532	Supplies Expense	–
540	Office Salaries Expense	12,950
550	Utilities Expense	–
555	Insurance Expense	–
558	Rent Expense	–
560	Professional Fees Expense	1,400
570	Depreciation Expense	–
580	Interest Expense	–
		1,111,811	1,111,811

Adjusting items and notes:
1. The company uses a calendar year.
2. Insurance was prepaid at the beginning of the year by paying $6,000 for a 12 month policy.
3. It is estimated that supplies on hand equal $2,000 at month end.
4. The rent is prepaid quarterly and $7,500 covered the first quarter of 2017.
5. Equipment was all purchased at one time and has a life of 10 years with no salvage value.  The equipment was 40 months old at the end of October.
6. At month end sales commissions of $3,000 were earned but unpaid.  The company records sales commission liability as a salary liability.
7. The interest rate on long term debt is 6% per year.  Interest will actually be paid at the end of each calendar quarter. (don’t forget the current portion of debt)
8. It is estimated that electricity usage equaled $800 during January and the company expects to be billed in early February.  Bills for utilities are entered into accounts payable.
9. The inventory balance includes purchases made during January of $215,000.
10. The company has a long history of cost of goods sold and 70% is a reasonable estimate to use for monthly financial statements.
11. The company considers sales salaries, commissions, supplies, and advertising to be selling expense and all other expenses to be administrative.
Do the following requirements below.  Create proper headings for each statement.
1. Record adjusting journal entries from information above.  You will need to calculate cost of goods sold to adjust inventory.  Draw T-accounts on your draft to help figure this out.
2. Prepare an adjusted trial balance including the adjusting entries made
3. Prepare a multi-step income statement.  Consider depreciation to be a selling and administrative expense.  Include a detailed cost of goods sold section including purchases and goods available for sale.
4. Prepare a statement of retained earnings
5. Prepare a classified balance sheet
6. Prepare closing journal entries including an entry to adjust the inventory balance.  Prepare entries to income summary and retained earnings even though this is a month end only.
Account #	Account Title	debit	credit
555	Insurance expense	6,000
130	Prepaid insurance		6,000
532	Supplies expense	1,252
125	Supplies on hand		1,252
	No Entry
570	Depreciation Expense	180,000
160	Accumulated Depreciation		180,000
530	Sales Salaries Expense	15,600
210	Salaries payable		15,600
240	Long Term Debt	127,200
580	Interest Expense		127,200
Baltimore Glass Company
Adjusted Trial Balance
January 31, 2017
Acct.
No.	Account Title	Debit	Credit
101	Cash
110	Accounts Receivable
120	Merchandise Inventory
125	Supplies on Hand
130	Prepaid Insurance
131	Prepaid Rent
150	Equipment
160	Accumulated Depreciation
202	Accounts Payable
210	Salaries Payable
215	Interest Payable
220	Current Portion of Long Term Debt
240	Long Term Debt
301	Capital Stock
302	Retained Earnings, 12/31/16
401	Sales
510	Cost of Goods Sold
520	Advertising Expense
530	Sales Salaries Expense
531	Sales Commission Expense
532	Supplies Expense
540	Office Salaries Expense
550	Utilities Expense
555	Insurance Expense
558	Rent Expense
560	Professional Fees Expense
570	Depreciation Expense
580	Interest Expense

 

Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"

Bravo Company’s January 1, 2016 finished goods inventory was

$100,000. The January 1, 2017 finished goods inventory is $60,000.  Cost of goods manufactured for the FY 2016 was $250,000. Use this information to determine the dollar amount of the FY 2016 cost of goods sold. (Round dollar values & enter as whole dollars only.)

 

Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"