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    Nancy Drew Boutique -Trial Balance Sheets

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    P3-9 Adjusting and Closing
    Presented below is the December 31 trial balance of Nancy Drew Boutique.

    Debit Credit
    Cash $18,500
    Accounts Receivable $42,000
    Allowance for Doubtful Accounts $700
    Inventory, December 31 $80,000
    Prepaid Insurance $5,100
    Furniture and Equipment $84,000
    Accumulated Depreciation - Furniture and Equipment $35,000
    Notes Payable $28,000
    Common Stock $80,600
    Retained Earnings $10,000
    Sales $600,000
    Cost of Goods Sold $398,000
    Sales Salaries Expense $50,000
    Advertising Expense $6,700
    Administrative Salaries Expense $65,000
    Office Expense $5,000
    $754,300 $754,300

    Instructions:
    (a) Construct T-accounts and enter the balances shown.
    (b) Prepare adjusting jouranl entries for the following and post to the T-accounts. (Omit explanations.)

    Open additional T-accounts as necessary. (The books are closed yearly on December 31.)
    (1) Bad debts are estimated to be $1,400.

    (2) Furniture and equipment is depreciated based on a 6-year life (no salvage value).

    (3) Insurance expired during the year $2,550.

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    https://brainmass.com/business/trial-balance/nancy-drew-boutique-trial-balance-sheets-415693

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    Solution Summary

    P3-9 Adjusting and Closing
    Presented below is the December 31 trial balance of Nancy Drew Boutique.

    Debit Credit
    Cash $18,500
    Accounts Receivable $42,000
    Allowance for Doubtful Accounts $700
    Inventory, December 31 $80,000
    Prepaid Insurance $5,100
    Furniture and Equipment $84,000
    Accumulated Depreciation - Furniture and Equipment $35,000
    Notes Payable $28,000
    Common Stock $80,600
    Retained Earnings $10,000
    Sales $600,000
    Cost of Goods Sold $398,000
    Sales Salaries Expense $50,000
    Advertising Expense $6,700
    Administrative Salaries Expense $65,000
    Office Expense $5,000
    $754,300 $754,300

    Instructions:
    (a) Construct T-accounts and enter the balances shown.
    (b) Prepare adjusting jouranl entries for the following and post to the T-accounts. (Omit explanations.)

    Open additional T-accounts as necessary. (The books are closed yearly on December 31.)
    (1) Bad debts are estimated to be $1,400.

    (2) Furniture and equipment is depreciated based on a 6-year life (no salvage value).

    (3) Insurance expired during the year $2,550.

    $2.19

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