Omit all general journal entry explanations. Be sure to include correct dollar signs, commas, underlines, and double-underlines where required.
Omit all general journal entry explanations. Be sure to include correct dollar signs, commas, underlines, and double-underlines where required.
XYZ Company’s December 31, 2015, trial balance is as follows:
| XYZ Company | ||
| Trial Balance | ||
| December 31, 2015 | ||
| Account | Debit | Credit |
| Cash | $ 43,500 | |
| Accounts Receivable | 53,500 | |
| Allowance for Doubtful Accounts | 1,500 | |
| Notes Receivable | 30,000 | |
| Merchandise Inventory | 55,000 | |
| Land | 20,000 | |
| Building | 150,000 | |
| Accumulated Depreciation, Building | $ 15,000 | |
| Equipment | 50,000 | |
| Accumulated Depreciation, Equipment | 21,000 | |
| Goodwill | 26,000 | |
| Accounts Payable | 25,000 | |
| Long-Term Notes Payable | 75,000 | |
| Common Stock, $10 par, 2,000 shares authorized and outstanding | 20,000 | |
| Retained Earnings | 147,000 | |
| Sales Revenue | 700,000 | |
| Salaries Expense | 150,000 | |
| Utilities Expense | 3,500 | |
| Cost of Goods Sold | 350,000 | |
| Administrative Expenses | 55,000 | |
| Sales Expenses | 15,000 | _______ |
| Totals | $1,003,000 | $1,003,000 |
XYZ is a small company and records adjusting entries and closing entries only at fiscal (calendar) year end. Correcting and adjusting entries have not been recorded.
Additional Information:
- Notes Receivable is a 3-month, 6% note accepted on November 1, 2015.
- Long-Term Notes Payable is a 5-year, 5% note that was signed on July 1, 2015. Interest is payable annually.
- Building is depreciated at 3% per year. There is no salvage value.
- Equipment is depreciated at 15% per year. There is no salvage value.
- XYZ discovered, on December 30, that the inexperienced bookkeeper recorded in the general journal and general ledger that day’s $1,500 cash sales as a debit to Accounts Receivable and a credit to Sales Revenue.
- The year-end physical count for Merchandise Inventory reflected a value of $51,500. Any difference in value will not be considered theft or loss.
- Salaries for the last half of December, payable in January, amount to $5,500.
XYZ estimates that of the Accounts Receivable, 5% will not be collectable.
Required:
- Prepare in journal form, any required correcting entries.
- Prepare in journal form, all end-of-the-period adjusting entries.
- Prepare a December adjusted trial balance.
- Prepare a classified balance sheet for the year ended December 31, 2015.
Prepare in journal form, the closing entries for the year ended December 31, 2015.
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