Com Prob 2

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COMPREHENSIVE PROBLEM 2
Music-Is-Us
A mini-practice set illustrating numerous aspects of the accounting cycle for a merchandising business organized as a corporation. Students are expected to:
(1) prepare a bank reconciliation, (2) make adjusting entries—including adjustments related to marketable securities, uncollectible accounts, inventory shrinkage, and depreciation, (3) prepare an income statement, a statement of retained earnings, and a balance sheet, and (4) assess the financial condition of the business from a short-term creditor’s perspective.

2 to 3 hours
Strong

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2 to 3 hours,
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MUSIC-IS-US
Adjusted Trial Balance
As of December 31, 2015
Cash
Marketable securities
Accounts receivable
Allowance for doubtful accounts
Merchandise inventory
Office supplies
Prepaid insurance
Building and fixtures
Accumulated depreciation
Land
Accounts payable
Unearned customer deposits
Income taxes payable
Capital stock
Retained earnings
Unrealized holding gain on investments
Sales
Cost of goods sold
Bank service charges
Uncollectible accounts expense
Salary and
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