Worksheet The Fiorillo Company has the following account balances on December 31, 2010 prior to any adjustments:
Accounts receivable 4700.00
Allowance for doubtful accounts $60.00
Prepaid insurance 600.00
Accumulated depreciation: buildings 11500.00
Accumulation depreciation: equipment 3100.00
Accounts payable 4300.00
Notes payable (due March 1, 2011) 1400.00
Unearned rent 1200.00
Mortgage payable (due January 1, 2015) 7300.00
Capital Stock (2000 shares) 10000.00
Retained earnings (January 1, 2010) 18075.00
Dividends distributed 1300.00
Sales revenue 49355.00
Cost of goods sold 27185.00
Salaries expense 4080.00
Utilities expense 2000.00
Office supplies expense 770.00
Delivery expense 1275.00
Other expenses 980.00
Additional adjustment information: (a) depreciation on buildings, $1,100; on equipment, $600; (b) bad debts expense, $240;
(c) interest accumulated but not paid: on note payable, $50; on mortgage payable, $530 (this interest is due during the next
accounting period); (d) insurance expired, $175; (e) salaries accrued but not paid $370; (f) rent that was collected in advance
and is now earned at year-end, $800; (g) office supplies on hand at year-end, $230 (expensed when originally purchased earlier
in the year); and (h) the income tax rate is 30% on current income and is payable in the first quarter of 2011.
1. Transfer the account balances to a 10-column worksheet and prepare a trial balance.
2. Complete the worksheet.
3. Prepare the company's income statement, retained earnings statement, and balance sheet.
4. Prepare (a) adjusting and (b) closing entries in the general journal.
The solution transfers the account balances to a worksheet and prepares a trial balance.