Problem - The following trial balance was taken from the books of Fisk Corporation on December 31, 2012.
Account Debit Credit
Cash $ 9,000
Accounts Receivable 40,000
Notes Receivable 10,000
Allowance for Doubtful Accounts $ 1,800
Inventory 44,000
Prepaid Insurance 4,800
Equipment 110,000
Accumulated Depreciation--Equip. 15,000
Accounts Payable 10,800
Common Stock 44,000
Retained Earnings 75,000
Sales Revenue 260,000
Cost of Goods Sold 126,000
Salaries and wages Expense 50,000
Rent Expense 12,800
Totals $406,600 $406,600
At year end, the following items have not yet been recorded.
a. Insurance expired during the year, $2,000.
b. Estimated bad debts, 1% of gross sales.
c. Depreciation on equipment, 10% per year.
d. Interest at 6% is receivable on the note for one full year.
e. Rent paid in advance at December 31, $5,400 (originally charged to expense).
f. Accrued salaries and wages at December 31, $5,800.
Instructions (Prepare entries on a separate sheet of paper)
(a) Prepare the necessary adjusting entries.
(b) Prepare the necessary closing entries.