Corporation sells video games for personal computers The una

Corporation sells video games for personal computers. The unadjusted trial balance as of 31, 2018, appears 31 is the company\'s fiscal year-end. The company uses the perpetual inventory system. 96,460 28,509 Supplies 73,500 Office equipment Note payable Common stock Retained earnings 38,780 5,400 32,100 135,000 21,350 Cost of goods sold Interest expense salaries and wage expense 140,009 61,150 19,480 2,560 Supplies expense utility expense Totals 514,120 514,1.20 Cash dividends paid to shareholders during the year amounted to $10,125. Information necessary to prepare the year-end adjusting entries appears below 1 The office equipment was purchased in 2016 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 $8,100 3. The company borrowed on September 1, 2018. 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% 4 The company debits supplies expense when supplies are purchased. Supplies on hand at year-end cost $640 5. Prepaid rent at year-end should be $1.450 the worksheet belovw 2-a. Use the 2-b. Use the 2-c. Use the 3. Prepare the necessary closing entries assuming that adjusting entries have been correctly posted to the accounts. in the worksheet to prepare an income statement for 2018 in the worksheet to prepare a statement of shareholders equity for 2018 in the worksheet to prepare a balance sheet as of

Solution

EXCALIBUR CORPORATION Work Sheet For Year Ended Dec 31, 2018 Trial Balance Adjustments Adjusted Trial Balance Income Summary Balance Sheet Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Balance Sheet Accounts: Cash      96,460.00      96,460.00      96,460.00 Accounts Receivable      28,500.00      28,500.00      28,500.00 Supplies                     -            640.00            640.00            640.00 Prepaid Rent                     -        1,450.00        1,450.00        1,450.00 Inventory      70,500.00      70,500.00      70,500.00 Office Equipment      89,000.00      89,000.00      89,000.00 Accumulated Dep. - Office Equip.      11,570.00    11,125.00      22,695.00      22,695.00 Accounts Payable      38,700.00      38,700.00      38,700.00 Salaries & Wages Payable        5,400.00      8,100.00      13,500.00      13,500.00 Notes Payable      32,100.00      32,100.00      32,100.00 Interest Payable      1,070.00        1,070.00        1,070.00 Common Stock    135,000.00    135,000.00    135,000.00 Retained Earnings      21,350.00      21,350.00      21,350.00 Sales Revenue    270,000.00    270,000.00    270,000.00 Cost of Goods Sold    140,000.00    140,000.00    140,000.00 Interest Expense                     -        1,070.00        1,070.00        1,070.00 Salaries & Wages Expense      61,150.00      8,100.00      69,250.00      69,250.00 Rent Expense      19,400.00      1,450.00      17,950.00      17,950.00 Supplies Expense        2,560.00          640.00        1,920.00        1,920.00 Utility Expense        6,550.00        6,550.00        6,550.00 Depreciation Expense    11,125.00      11,125.00      11,125.00 Total    514,120.00    514,120.00    22,385.00    22,385.00    534,415.00    534,415.00    247,865.00    270,000.00    286,550.00    264,415.00 Net Income      22,135.00                     -                       -        22,135.00 Totals    270,000.00    270,000.00    286,550.00    286,550.00 Answer 2a. EXCALIBUR CORPORATION Income Statement For Year Ended Dec 31, 2018 Sales Revenue    270,000.00 Cost of Goods Sold    140,000.00 Gross Margin    130,000.00 Expenses Salaries & Wages Expense      69,250.00 Rent Expense      17,950.00 Supplies Expense        1,920.00 Utility Expense        6,550.00 Depreciation Expense      11,125.00    106,795.00 Net Operating Income      23,205.00 Interest Expense        1,070.00 Net Income      22,135.00 Answer 2b. EXCALIBUR CORPORATION Statement of Shareholders\' Equity Common Stock Retained Earnings Total Balance at Jan 1, 2018    135,000.00      31,475.00    166,475.00 Net Income                     -        22,135.00      22,135.00 Cash Dividends                     -      (10,125.00)    (10,125.00) Total    135,000.00      43,485.00    178,485.00 Answer 2c. EXCALIBUR CORPORATION Balance Sheet As on Dec 31, 2018 Assets Current Assets Cash      96,460.00 Accounts Receivable      28,500.00 Supplies            640.00 Prepaid Rent        1,450.00 Inventory      70,500.00    197,550.00 Property, Plant & Equipment Office Equipment      89,000.00 Accumulated Dep. - Office Equip.    (22,695.00)      66,305.00 Total Assets    263,855.00 Liabilities & Stockholders\' Equity Liabilities Current Liabilities Accounts Payable      38,700.00 Salaries & Wages Payable      13,500.00 Interest Payable        1,070.00      53,270.00 Long Term Liabilities Notes Payable      32,100.00 Total Liabilities      85,370.00 Total Stockholders\' Equity    178,485.00 Total Liabilities & Stockholders\' Equity    263,855.00 Answer 3. Closing Journal Entry Date Particulars Dr. Amt. Cr. Amt. 31-Dec-17 Sales Revenue    270,000.00    Income Summary    270,000.00 (To record the close of revenue accounts) 31-Dec-17 Income Summary    107,865.00 Interest Expense        1,070.00    Salaries & Wages Expense      69,250.00    Rent Expense      17,950.00    Supplies Expense        1,920.00    Utility Expense        6,550.00    Depreciation Expense      11,125.00 (To record the close of expense accounts) 31-Dec-17 Income Summary      22,135.00 Retained Earnings      22,135.00 (To record the net income)