TRIAL balance dated Dec 31, 2019MUSIC-IS-US, INCTRIAL BALANCEDECEMBER 31, 2018cash …………………………………………………. $         45,000Marketable securities………………………….          25,000                                      Accounts receivable……………………………        125,000Allowance for doubtful accounts…………                                 $5,000Merchandise inventory………………………..       250,000Office supplies...................................................         1,200Prepaid insurance……………………………………       6,600    Building and fixtures……………………………     1,791,000                      Accumulated depreciation……………………….                               800,000Land…………………………………………………...           64,800Accounts payable……………………………………                                 70,000Unearned customer deposits……………………                                 8,000Income taxes payable……………………………….                                75,000Capital stock………………………………………….                               1,000,000Retained earnings..................................................                                240,200Unrealized holding gain on investments………                                6,000sales………………………………………………….                                    1,600,000          Cost of goods sold………………………………….          958,000Bank service charges………………………………                 200Uncollectible accounts expense…………………..         9,000Salary and wages expense………………………..         395,000Office supplies expense……………………………                 400Insurance expense…………………………………                 6,400Utilities expense…………………………………….                3,600Depreciation expense………………………………             48,000Income tax expense……………………………              75,000                                                                                                                                      $3,804,200                                                                               $3,804,200Other informationThe most recent bank statement reports a balance of $46.975. Included with the bank statement was a $2,500 check from Iggy Smarts, a professional musician, charged back to Music-Is-Us as NSF. The bank's monthly service charge was $25. Three checks written by Music-Is-Us to suppliers of merchandise has no yet cleared the bank for payment as of the statement date. These cheques included: no. 508 $5,500; no. 511, $7,500: and no. 521, $8,000. Deposits of $16,500 reached the bank too late for inclusion in the current bank statement. The company prepare a bank reconciliation at the end of each month.2. has a portfolio of marketable securities that originally cost S19.000. As of December 31, the market value of these securities was $27,500. All short-term investment are classified as “available for sale”During December, $6,400 of accounts receivable were written off a uncollectable. A recent aging of the company's accounts receivable led management to conclude that an allowance for doubtful accounts of $8.500 is needed at December 31, 2018.4 The company uses a perpetual inventory system. A year end physical count revealed that   several guitars reported in the inventory records were missing. The cost of the missing units amounted to $1.350. This amount is not considered significant relative to the total cost of inventory on hand.5. At December 31. approximately $900 in office supplies remained on hand.pay  insurance policies 12 months in advance. Its most recent payment was made on November 1. 2018. The cost of this policy was slightly higher than the cost of coverage for the previous 12 monthsDepreciation expense related to the company's building and fixtures is $5.000 for themonth ending December 31, 2018.not uncommon for experienced musicians to order custom guitars made to their exact specifications. Manufacturers do not allow any sales returns of custom-made guitars. The entire sales amount is collected at the time a custom order is placed and is credited to an account entitled "Unearned Customer Deposits, as a December 31, $4,800 of these deposits remained unfilled because the special-order guitars have not been received from manufacturers. The cost of goods sold and the reduction in inventory associated with all custom orders is recorded when the merchandise is delivered to customers. At that time, the adjusting entry requires only a decrease to unearned customer deposits and an increase in sales.Accrued income taxes payable for the entire year ending December 31, 2018, total Instructions S81,000. No income tax payments are due until early in 2019.Prepare the entry to account for the guitars missing from the company’s investor at the end of the year. prepares the adjusting entry for supplies office using during December.Prepare the adjusting entry to account for the expiration of the company insurance policy during December.

Question
Asked Sep 24, 2019
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TRIAL balance dated Dec 31, 2019

MUSIC-IS-US, INC
TRIAL BALANCE
DECEMBER 31, 2018


cash …………………………………………………. $         45,000
Marketable securities………………………….          25,000                                     
Accounts receivable……………………………        125,000
Allowance for doubtful accounts…………                                 $5,000
Merchandise inventory………………………..       250,000
Office supplies...................................................         1,200
Prepaid insurance……………………………………       6,600   
Building and fixtures……………………………     1,791,000                     
Accumulated depreciation……………………….                               800,000

Land…………………………………………………...           64,800
Accounts payable……………………………………                                 70,000
Unearned customer deposits……………………                                 8,000
Income taxes payable……………………………….                                75,000
Capital stock………………………………………….                               1,000,000
Retained earnings..................................................                                240,200
Unrealized holding gain on investments………                                6,000
sales………………………………………………….                                    1,600,000         
Cost of goods sold………………………………….          958,000
Bank service charges………………………………                 200
Uncollectible accounts expense…………………..         9,000
Salary and wages expense………………………..         395,000
Office supplies expense……………………………                 400
Insurance expense…………………………………                 6,400
Utilities expense…………………………………….                3,600
Depreciation expense………………………………             48,000
Income tax expense……………………………              75,000                                   
                                                                                                   $3,804,200                                                                               $3,804,200

Other information


  1. The most recent bank statement reports a balance of $46.975. Included with the bank statement was a $2,500 check from Iggy Smarts, a professional musician, charged back to Music-Is-Us as NSF. 

The bank's monthly service charge was $25. Three checks written by Music-Is-Us to suppliers of merchandise has no yet cleared the bank for payment as of the statement date. These cheques included: no. 508 $5,500; no. 511, $7,500: and no. 521, $8,000. Deposits of $16,500 reached the bank too late for inclusion in the current bank statement. The company prepare a bank reconciliation at the end of each month.

2. has a portfolio of marketable securities that originally cost S19.000. As of December 31, the market value of these securities was $27,500. All short-term investment are classified as “available for sale”


  1. During December, $6,400 of accounts receivable were written off a uncollectable. A recent aging of the company's accounts receivable led management to conclude that an allowance for doubtful accounts of $8.500 is needed at December 31, 2018.


4 The company uses a perpetual inventory system. A year end physical count revealed that   several guitars reported in the inventory records were missing. The cost of the missing units amounted to $1.350. This amount is not considered significant relative to the total cost of inventory on hand.

5. At December 31. approximately $900 in office supplies remained on hand.


  1. pay  insurance policies 12 months in advance. Its most recent payment was made on November 1. 2018. The cost of this policy was slightly higher than the cost of coverage for the previous 12 months

  2. Depreciation expense related to the company's building and fixtures is $5.000 for the
    month ending December 31, 2018.

  3. not uncommon for experienced musicians to order custom guitars made to their exact specifications. Manufacturers do not allow any sales returns of custom-made guitars. The entire sales amount is collected at the time a custom order is placed and is credited to an account entitled "Unearned Customer Deposits, as a December 31, $4,800 of these deposits remained unfilled because the special-order guitars have not been received from manufacturers. The cost of goods sold and the reduction in inventory associated with all custom orders is recorded when the merchandise is delivered to customers. At that time, the adjusting entry requires only a decrease to unearned customer deposits and an increase in sales.

  4. Accrued income taxes payable for the entire year ending December 31, 2018, total Instructions S81,000. No income tax payments are due until early in 2019.
  1. Prepare the entry to account for the guitars missing from the company’s investor at the end of the year.

 

  1. prepares the adjusting entry for supplies office using during December.

  2. Prepare the adjusting entry to account for the expiration of the company insurance policy during December.

 

 

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Expert Answer

Step 1
A jawnal enty reconds
entry ystem accounting. Eueny jounal entry
busines transachen in double
Credit account. It is
business ransaction
debit accout and a
witten eord of
has a
help_outline

Image Transcriptionclose

A jawnal enty reconds entry ystem accounting. Eueny jounal entry busines transachen in double Credit account. It is business ransaction debit accout and a witten eord of has a

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Step 2
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S.NO
Debit Amount Credit Amount
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Cast of goods old
1.
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1,350
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the cast of missing gui-
taru)
help_outline

Image Transcriptionclose

Jauunal entry to Yecord the cost of missi ng guitares ui be S.NO Debit Amount Credit Amount Cin $) 350 Parcticulars Cins) Cast of goods old 1. Iwentery 1,350 Cto increase the cout and |Heduce the inuantony uuth the cast of missing gui- taru)

fullscreen
Step 3
Aidjusting jouenal entries are
the end f
prepared by
a certain period to comply with
campany at
the
a
matching principle of accounting and to adjust varcieus
ecpenses and reuenue accaunt balances
help_outline

Image Transcriptionclose

Aidjusting jouenal entries are the end f prepared by a certain period to comply with campany at the a matching principle of accounting and to adjust varcieus ecpenses and reuenue accaunt balances

fullscreen

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