Excalibur Corporation The following information applies to t

The following information applies to the questions displayed below Excalibur Corporation sells video games for personal computers. The unadjusted trial balance as of December 31, 2016, appears below. December 31 is the company\'s fiscal year-end. The company uses the perpetual inventory system. Account Title Cash Accounts receivable Supplies Prepaid rent Inventory Office equipment Accumulated depreciation-office equipment Accounts payable Salaries and wages payable Note payable Common stock Retained earnings Sales revenue Cost of goods sold Interest expense salaries and wage expense Rent expense Supplies expense Utility expense Debits Credits 61,620 22,000 0 0 51,000 63,000 8,190 24.400 2,800 28,200 70,000 14,200 205,000 107,500 0 29,950 11,600 1,520 4,600 Totals 352.790 352,790 Cash dividends paid to shareholders during the year amounted to $5.250 Information necessary to prepare the year-end adjusting entries appears below. . The office equipment was purchased in 2014 and is being depreciated using the straight-ine method over an eight-year useful life with no salvage value 2. Accrued salaries and wages at year-end should be $4.200 3. The company borrowed $28.200 on September 1, 2016. The principal is due to be repaid in 10 years Interest is payable twice a year on each August 31 and February 28 at an annual rate of 10% The company debits supplies expense when supplies are purchased. Supplies on hand at year end cost $380 4. 5. Prepaid rent at year-end should be $800 Type here to search

Solution

1 Worksheet Unadjusted trial balance Adjusting balance Adjusted trial balance Income statement Balance sheet Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Cash 61620 61620 61620 Accounts receivable\' 22000 22000 22000 Supplies 0 380 380 380 Prepaid rent 0 800 800 800 Inventory 51000 51000 51000 Office equipment 63000 63000 63000 Accumulated depreciation-Office equipment 8190 7875 16065 16065 Accounts payable 24400 24400 24400 Salaries and wages payable 2800 4200 7000 7000 Note payable 28200 28200 28200 Interest payable 0 940 940 940 common stock 70000 70000 70000 Retained earnings 14200 14200 14200 Sales revenue 205000 205000 205000 Cost of goods sold 107500 107500 107500 interest expense 0 940 940 940 Salaries and wages expense 29950 4200 34150 34150 Rent expense 11600 800 10800 10800 Supplies expense 1520 380 1140 1140 Utility expense 4600 4600 4600 Depreciation expense 0 7875 7875 7875 Current year profit 37995 37995 352790 352790 14195 14195 365805 365805 205000 205000 198800 198800 Adjusting entries Dr. Cr. 1 Depreciation expense 7875 Accumulated depreciation-Office equipment 7875 (63000/8) 2 Salaries and wages expense 4200 Salaries and wages payable 4200 3 interest expense 940 Interest payable 940 (28200*10%*4/12) (interest for 4 months) 4 Supplies 380 Supplies expense 380 5 Prepaid rent 800 Rent expense 800 2-a. Income statement Sales 205000 Less:cost of goods sold 107500 Gross profit 97500 Less: Expenses interest expense 940 Salaries and wages expense 34150 Rent expense 10800 Supplies expense 1140 Utility expense 4600 Depreciation expense 7875 59505 Net income 37995 2-b. Statement of shareholder\'s equity Common stock Retained earnings Total shareholder\'s equity Balance at january 1,2016 70000 14200 84200 Add: Net income 37995 Balance at december 31,2016 70000 52195 122195 2-c. Balance sheet current assets: Cash 61620 Accounts receivable\' 22000 Supplies 380 Prepaid rent 800 Inventory 51000 Non-current assets Office equipment 63000 Less: Accumulated depreciation- Office equipment 16065 46935 Total assets 182735 Current liabilities Accounts payable 24400 Salaries and wages payable 7000 Interest payable 940 Non-Current liabilities Note payable 28200 Equity common stock 70000 Retained earnings 52195 Total liabilities and stockholder\'s equity 182735