The unadjusted trial balance as of December 31, 2013 for the Bagel Company appears below. December 31 is the company’s fiscal year-end
Account Title Debits Credits
Cash 8,000
Accounts Receivable 9,000
Allowance for Uncollectible Accounts 50
Prepaid Insurance 3,000
Land 200,000
Buildings 50,000
Accumulated Depreciation – Buildings 20,000
Equipment 100,000
Accumulated Depreciation – Equipment 40,000
Accounts Payable 35,000
Salaries Payable -0-
Unearned Rent Revenue -0-
Common Stock 200,000
Retained Earnings 56,450
Sales Revenue 90,000
Interest Revenue 3,000
Rent Revenues 7,500
Salaries Expense 37,000
Bad Debt Expense -0-
Depreciation Expense -0-
Insurance Expense -0-
Utility Expense 30,000
Maintenance Expense 15,000
Totals 452,000 452,000
Complete the following steps: (a) Enter the account balances into T-accounts. (b) From the trial balance and information given, prepare adjusting entries and post the amounts to the T-accounts. (1) The buildings have an estimated useful life of 50 years with no salvage value. The company uses the straight-line depreciation method. (2) The equipment is depreciated at 10 percent of original cost per year. (3) Prepaid insurance expired during the year, $1,500. (4) It is estimated that 10% of the accounts receivable balance will be uncollectible. (5) Accrued salaries at year-end should be $1,500. (6) Unearned rent revenue at year-end should be $1,200. (c) Prepare an adjusted trial balance. (d) Prepare closing entries. (e) Prepare a post-closing trial balance. (f) Prepare an Income Statement and Balance Sheet.