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The following trial balance was taken from the books of Fisk Corporation on December 31, 2014.
| | Account | Debit | Credit |
| Cash | $ 9,000 | |
| Accounts Receivable | 40,000 | |
| Notes Receivable | 10,000 | |
| Allowance for Doubtful Accounts | | $ 1,800 |
| Inventory | 44,000 | |
| Prepaid Insurance | 4,800 | |
| Equipment | 110,000 | |
| Accumulated Depreciation--Equip. | | 15,000 |
| Accounts Payable | | 10,800 |
| Common Stock | | 44,000 |
| Retained Earnings | | 75,000 |
| Sales Revenue | | 260,000 |
| Cost of Goods Sold | 126,000 | |
| Salaries and wages Expense | 50,000 | |
| Rent Expense | 12,800 | ________ |
| | Totals | $406,600 | $406,600 |
| | | | | |
At year end, the following items have not yet been recorded.
| a. | Insurance expired during the year, $3,000. |
| b. | Estimated bad debts, 1.5% of gross sales. |
| c. | Depreciation on equipment, 12% per year on original cost. |
| d. | Interest at 6% is receivable on the note for one full year. |
| *e. | Rent paid in advance at December 31, $6,500 (originally charged to expense). |
| f. | Accrued salaries and wages at December 31, $7,800. |
Instructions
| (a) | Prepare the necessary adjusting entries. |
| (b) | Prepare the necessary closing entries. |
Answer & Explanation
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