Question

DULU Instructions a Prenare a bank reconciliation and make the journal entries to update the account Music-Is-Us as of December 31, 2018. b. Prepare the adjusting entry to update the company's marketable securities portfolio mark-to-market value. c. Prepare the adjusting entry at December 31, 2018, to report the company's accounts recei able at their net realizable value (i.e., total amount receivable, less estimated allowance uncollectible accounts). d. Prepare the entry to account for the guitars missing from the company's inventory at the end of the year. e. Prepare the adjusting entry to account for the office supplies used during December f. Prepare the adjusting entry to account for the expiration of the company's insurance policies during December g. Prepare the adjusting entry to account for the depreciation of the company's building and fixtures during December. h. Prepare the adjusting entry to report the portion of unearned customer deposits that were earned during December. i. Prepare the adjusting entry to account for income tax expense that accrued during December j. On the basis of the adjustments made to the accounting records in parts a through i, prepare the company's adjusted trial balance at December 31, 2018. k. Using the adjusted trial balance prepared in partj, prepare an annual income statement, saam ment of retained earnings, and a balance sheet dated December 31, 2018.

Answer 1

Bank Reconciliation
December 31, 2018
Cash balance per bank		46975
Add: Deposits in transit		16500
		63475
Less: Outstanding checks
No. 508	5500
No. 511	7500
No. 521	8000	21000
Adjusted balance		42475
Cash balance per books		45000
Less:
NSF check	2500
Bank service charge	25
		2525
Adjusted balance		42475

	Account Titles and Explanation	Debit	Credit
1	Accounts receivable	2500
	Cash		2500
	(To record NSF check)
	Bank service charges	25
	Cash		25
	(To record monthly bank service charges)
2	Marketable securities ($27500 - $25000)	2500
	Unrealized holding gain on investments		2500
	(To record available-for-sale investments at fair value)
3	Uncollectible accounts expense ($8500 - $5000)	3500
	Allowance for doubtful accounts		3500
	(To record uncollectibe accounts expense)
4	Cost of goods sold	1350
	Merchandise inventory		1350
	(To record shortage in inventory)
5	Office supplies expense ($1200 - $900)	300
	Office supplies		300
	(To record office supplies expense)
6	Insurance expense ($6600/11)	600
	Prepaid insurance		600
	(To record insurance expense)
7	Depreciation expense	5000
	Accumulated depreciation		5000
	(To record depreciation expense)
8	Unearned customer deposits ($8000 - $4800)	3200
	Sales		3200
	(To record sales revenue)
9	Income tax expense ($81000 - $75000)	6000
	Income tax payable		6000
	(To record income tax expense)