XYZ Company's December 31, 2015, trial balance is as follows:
| XYZ Company |
| Trial Balance |
| December 31, 2015 |
| Account |
Debit |
Credit |
| Cash |
mce_markernbsp; 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 |
|
mce_markernbsp; 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