The following information relates to Sharp Co. for year-end 2007.
1. The allowance for bad debts should be 6% of accounts receivables.
2. A physical count of supplies at year-end showed $3,200 on hand.
3. The note receivable came from a customer on October 1. It was a six month note at 6% interest.
4. On September 1 the company paid $12,000 for years rent on the office building.
5. The useful life of the equipment is 10 years and the company uses the straight line method.
6. Accrued wages at year-end amounted to $900.
7. The note payable was taken out on June 1. It is a two year note at 8%.
8. On October 1 the company received $6,000 for a customer for future work. As of year-end 2/3 of the amount has been earned.
9. A count of year-end inventory showed $90,000 on hand.
10. The investment in stock is long term and the year end value was equal to the cost of the investment.
11. The land is held for future use.
12. The company purchased a one year insurance policy on May 1 and recorded it in Prepaid Insurance.
13. The company is 100,000 shares of common stock outstanding.
1. Prepare the adjusted trial balance.
2. Prepare an income statement, statement of retained earnings and a classified balance sheet.
Unadjusted Trial balance:
Accounts Receivable: 80,000
Allowance for Bad Debts 2,000
Note Rec 40,000
Prepaid Insur 2,400
Accum. Depr. 40,000
Accts Pay 38,000
Notes Pay. 60,000
Unearned Rev. 6,000
common stock: 100,000
retained earns. 35,500
cost of goods 140,000
wage expense 42,000
rent expense 12,000
supplies ex 1,1,00
insurance exp 6,000
bad debt exp 3,000
totals 629,500 629,500
Your tutorial is in Excel and sets up an unadjusted trial balance, adjusting entries, the adjusted trial balance and the required financial statements. This is now a template for similar problems.