A new merchandising business, Dazzle Corporation started its operations last January 1, 2020. Presented below is information concerning the financial condition of Dazzle Corporation for the calendar year 2020: Prepare adjusting entries. The following transactions has transpired during 2021:a. Furniture & fixtures was purchased on credit for Php50,000.b. Merchandise costing Php202,560 was bought, 50% was paid in cash and the remaining on account.c. Sold merchandise for Php150,000. The company maintains a mark-up of 60% based on cost.d. Utility bills for the year is Php5,368.Additional Information:e. The following fixed assets are as follows:Initial CostAccumulatedDepreciation (as ofDec. 31, 2020)Estimated UsefulLifeResidual ValueBuilding & Equipment84,80016,0005 yrs.4,800Furniture & Fixtures50,00005 yrs.1,000All fixed assets are depreciated using straight line method.f. Unexpired insurance at the end of the year is Php14,000.g. Wages of employees worth Php2,500 was paid in cash. This includes the wages from last year.h. Last year, Dazzle Corporation received an offer from local business owner to rent the unused portion of its land. Dazzle Corporation agreed to rent the land for 5 years, payable in advance. Dazzle Corporation received Php150,000 on December 31, 2020 and properly recorded theamount as deferred income in its December 31, 2020 balance sheet. ngASSETSCurrent AssetsCashAccounts ReceivableMerchandise InventoryPrepaid InsuranceTotal Current AssetsNoncurrent AssetsLandBuilding & EquipmentLess: Accumulated Depreciation -Building & EquipmentNet Noncurrent AssetsTOTAL ASSETSDazzle CorporationBalance SheetAs of December 31, 2020P 253,700.00120,000.0016,900.0015,000.00* 405,600.00500,000.0084,800.0016,000.00# 568,800.00# 974,400.00LIABILITIES & STOCKHOLDER'S EQUITYCurrent LiabilitiesAccounts PayableDeferred IncomeWages PayableBank Loans PayableTotal Current LiabilitiesStockholder's EquityCommon StocksRetained EarningsTotal Stockholder's EquityTOTAL LIABILITIES &STOCKHOLDER'S EQUITYP 124,000.00150,000.00500.0063,840.00# 338,340.00450,750.00185,310.00# 636,060.00#974,400.00

Adjusting entries are those journal entries which are passed at the end of accounting period in…

A new merchandising business, Dazzle Corporation started its operations last January 1, 2020. Presented below is information concerning the financial condition of Dazzle Corporation for the calendar year 2020: Prepare adjusting entries.

A new merchandising business, Dazzle Corporation started its operations last January 1, 2020. Presented below is information concerning the financial condition of Dazzle Corporation for the calendar year 2020: Prepare adjusting entries.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 24CE

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