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    Adjusting Entries and Closing Entries

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    The following trial balance was taken from the books of Fisk Corporation on December 31, 2004.

    Account Debit Credit

    Cash $ 12,000
    Accounts Receivable 40,000
    Note Receivable 7,000
    Allowance for Doubtful Accounts $ 1,800
    Merchandise Inventory 54,000
    Unexpired Insurance 4,800
    Furniture and Equipment 125,000
    Accumulated Depreciation of F. & E. 15,000
    Accounts Payable 10,800
    Common Stock 44,000
    Retained Earnings 55,000
    Sales 310,000
    Cost of Goods Sold 131,000
    Salaries Expense 50,000
    Rent Expense 12,800

    Totals $436,600 $436,600

    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 furniture and equipment, 12% per year.
    d. Interest at 8% 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 at December 31, $5,800.

    Instructions:
    (a) Prepare the necessary adjusting entries.
    (b) Prepare the necessary closing entries.

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    https://brainmass.com/business/the-adjusting-process/adjusting-entries-and-closing-entries-98798

    Solution Summary

    This response illustrates how to construct adjusting and closing entry records in a detailed format. In order to view this solution, a Word document needs to be opened.

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