Concept explainers
• LO2–5
Excalibur Corporation sells video games for personal computers. The unadjusted
Account Title | Debits | Credits |
Cash | 23,300 | |
Accounts receivable | 32,500 | |
Supplies | –0– | |
Prepaid rent | –0– | |
Inventory | 65,000 | |
Office equipment | 75,000 | |
10,000 | ||
Accounts payable | 26,100 | |
Salaries and wages payable | 3,000 | |
Note payable | 30,000 | |
Common stock | 80,000 | |
16,050 | ||
Sales revenue | 180,000 | |
Cost of goods sold | 95,000 | |
Interest expense | –0– | |
Salaries and wages expense | 32,350 | |
Rent expense | 14,000 | |
Supplies expense | 2,000 | |
Utility expense | 6,000 | |
Totals | 345,150 | 345,150 |
Information necessary to prepare the year-end adjusting entries appears below.
1. The office equipment was purchased in 2016 and is being
2. Accrued salaries and wages at year-end should be $4,500.
3. The company borrowed $30,000 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 $500.
5. Prepaid rent at year-end should be $1,000.
Required:
Prepare the necessary December 31, 2018, adjusting entries.
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Chapter 2 Solutions
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