Question

Problem 2-13 Worksheet [Appendix 2A] Excalibur Corporation sells video games for personal computers. The unadjusted trial balance as of December 31, 2018 appears below. December 31 is the company's fiscal year-end. The company uses the perpetual inventory system. Cash Accounts receivable Supplies Prepaid rent Inventory office equipment Accumulated depreciation- office equipment Accounts payable Salaries and wages payable Note payable Common stock Retained earnings Sales revenue Cost of goods sold Interest expense Salaries and wage expense Rent expense Supplies expense Utility expense Totals 91,100 27,500 67,500 85,000 11,050 36,500 5,000 31,500 125,000 20,250 260,000 135,000 56,350 18,200 2,400 6,250 489,300 489,300 Cash dividends pald to shareholders during the year amounted to $9,375. Information necessary to prepare the year-end adjusting entries appears below 1. The office equipment was purchased in 2016 and is being depreciated using the straight-line method over an eight- year useful life with no salvage value. 2. Accrued salaries and wages at year-end should be $7,500 3. The company borrowed $31,500 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 $600. 5. Prepaid rent at year-end should be $1,350 1. Complete the worksheet below 2-a. Use the information in the worksheet to prepare an income statement for 2018. 2-b. Use the information in the worksheet to prepare a statement of shareholders' equity for 2018 2-c. Use the information in the worksheet to prepare a balance sheet as of December 31, 2018 3. Prepare the necessary closing entries assuming that adjusting entries have been correctly posted to the accounts

Answer 1