Is the worksheet correct 1 Use the information in the worksh

Is the worksheet correct?

1. Use the information in the worksheet to prepare an Income Statement.

2. Use the information in the worksheet to prepare a statement of shareholder\'s equity 2016.

3. Use the information to prepare a balance sheet as of December 31, 2016.

4. Prepare the necessary closing entries assuming that adjusting entries have been correctly posted to the accounts.

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 Credits Debits 61,620 22,000 0 51,000 63,000 8,190 24,400 2,800 28,200 70,000 14,200 205,000 07,500 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 1. The office equipment was purchased in 2014 and is being depreciated using the straight-line 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 4. $380 5. Prepaid rent at year-end should be $800

Solution

1) Journal Entries;

2) Adjusted Trial Balance as on Dec 31, 2016 :

3) Income Statement :

4) Balance Sheet as on Dec 31, 2016 :

DAte	Accounts Titles	Debit $	Credit $
Dec 31, 16	Depreciation	7875
	Acc. Dep - Off. Equip		7875
	(63000/8)
	Salary & Wages Expense	4200
	Salary & Wages Payable		4200
	Interest Expenses	940
	Interest payable		940
	(28200*10%*4/12)
	Supplies	380
	Supplies Expense		380
	Prepaid Rent	940
	Rent		940