Preparation of Work Sheet and Adjusting and Closing Entries The following account balances are taken from the general ledger of Whitni Corporation on December 31, 2013, the end of its fiscal year. The corporation was organized January, 2005. Data for adjustments at December 31, 2013, are as follows: Depreciation (to nearest month for additions): furniture and fixtures, 10%; buildings, 4%. Additions to the buildings costing $150,000 were completed June 30, 2013. Allowance for Bad Debts is to be increased to a balance of $2,500. Accrued expenses: sales commissions, $700; interest on notes payable, $45; property taxes, $6,000. Prepaid expenses: insurance, $3,200. Accrued revenue: interest on notes receivable, $750. The following information is also to be recorded: On December 30, the board of directors declared a quarterly dividend of $1.50 per share on common stock, payable January 25, 2014, to stockholders of record January 15, 2014. Income taxes for 2013 are estimated at $15,000. The only charges to Retained Earnings during the year resulted from the declaration of the regular quarterly dividends.
1. Complete the 8-column spreadsheet. There should be a pair of columns each for trial balance, adjustments, income statement, and balance sheet.
2.a. Prepare all the adjusting entries necessary to record the effects of the foregoing information and to adjust the books of the corporation.
b. Prepare all the closing entries necessary to record the effects of the foregoing information and to close the books of the corporation. If an amount box does not require an entry, leave it blank.