The unadjusted trial balance of Pepe’s Pizza for fiscal 2012, includes the following items:
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Debit
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Credit
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Inventory
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$47,800
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Wages payable
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$ 800
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Prepaid insurance
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3,800
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Taxes payable
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0
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Your analysis reveals additional information as follows:
The cost of inventory items on hand is $23,200.
Employee wages for the two weeks prior to year end were $7,800 and these will not be paid until the 2013 fiscal year (no other wages are owed).
The unexpired portion of the company’s insurance policy at year end was $4,600.
The company’s tax accountant reports that the company will owe $54,000 for income taxes for fiscal 2012.
Prepare journal entries for any required accounting adjustments.