Textbook Problem

END-OF-PERIOD SPREADSHEET, ADJUSTING, CLOSING, AND REVERSING ENTRIES The trial balance for Danbury Kite Shop as of December 31, 20-1, is shown on page 608.

At the end of the year, the following adjustments need to be made:

(a, b)    Merchandise inventory as of December 31, $37,920.

(c, d, e)    Bill Danbury estimates that customers will be granted $3,000 in refunds of this year’s sales next year and the merchandise expected to be returned will have a cost of $2,160.

(f)    Unused supplies on hand, $420.

(g)    Insurance expired, $2,880.

(h)    Depreciation expense for the year on building, $24,000.

(i)    Depreciation expense for the year on equipment, $4,800.

(j)    Wages earned but not paid (Wages Payable), $624.

(k)    Unearned repair revenue on December 31, 20-1, $1,440.

REQUIRED

1. 1. Prepare an end-of-period spreadsheet.
2. 2. Prepare adjusting entries and post adjusting entries to an Income Summary T account.
3. 3. Prepare closing entries and post to a Capital T account. There were no additional investments this year.
4. 4. Prepare a post-closing trial balance.
5. 5. Prepare reversing entry(ies).

PROBLEM 15-10B