Question

Please help me with this! I'm so confused about how to prepare the trial balance before adjustment. Here is all the information:

E Beginning Balance Debit Credit Transactions Debit Credit Adjustments Debit Credit H Adjusted Trial Balance Debit Credit Balance Sheet Debit Credit Income Statement Debit Credit 5 Account Titles 7 Cash/Bank 8 Notes recivable 9 Account recivable 10 Interest received 11 double debts 12 Bad debts 13 Invetories 14 Prepaid rent 15 Utilities expenses 16 Office supplies 17 Supplies expenses 18 Prepaid insurance 19 Rent 20 Prepaid rets 21 Investment securties 22 Land for future development 23 Land 24 Building 25 Accumulated depreciation 26 Capitalize Development 27 Goodwill 28 Other Intangible assets 29 Notes Payable 30 Accounts Payable 31 Unearned revenue 32 Property tax payable 33 Interes payable 34 Interest expense 35 Income tax payable 36 Income tax

The 2019 Balance Sheet of the Victoria Co. is as follows:

Victoria Co. Balance Sheet As of December 31, 2019

Cash	85,000	Notes Payable	150,000
Notes Receivable	34,590	Accounts Payable	125,000
Accounts Receivable	35,000	Unearned Revenue	1,000
Less: Allowance for Doubtful A/Cs	(2,930)	Property Tax Payable	0
Inventories	65,000	Interest Payable	3,500
Office Supplies	0	Income Tax Payable	13,000
Prepaid Insurance	540	Salary and Wages Payable	6,500
Prepaid Rent	4,800	Utilities Payable	12,000
Total Current Assets	222,000	Total Current Liabilities	311,000
Long-term Investments		Provisions Related to Pensions	93,100
Investments in securities	180,000	Bonds Payable	300,000
Land for future development	60,000	Total Non-Current Liab.	393,100
Property, Plant, and Equipment		Total Liabilities	704,100
Land	145,000	Common Stock	240,000
Buildings	800,000	Paid-in-capital - Common Stock	96,000
Less: Accu. Depreciation	(240,000)	Preferred Stock	97,000
Intangible Assets		Paid-in-capital - Preferred Stock	7,400
Capitalized Development Costs	15,000	Retained Earnings	210,500
Goodwill	120,000	Accu. Other Comp. Income	5,000
Other Intangible Assets	48,000	Less: Treasury Stock	(10,000)
Total Non-Current Assets	1,128,000	Total Shareholders’ Equity	645,900
Total Assets	1,350,000	Total Liab. and Total Equity	1,350,000

During 2020, the following events occurred in the company. Additional information available at the end of 2020 is as follows:

1. On January 8, received checks, $20,000 from Kent and $15,000 from Montana, for sales on account made in December 2019 after discount period has lapsed.
2. On January 15, paid cash $125,000 to Hermann for merchandise purchased last year after discount period has lapsed.
3. On January 18, received checks, $34,590 for outstanding note receivable and associated interest of $410.
4. On January 25, paid off the utilities bill of $12,000 and income tax of 13,000, and wages payable of 6,500.
5. On January 26, purchased merchandise on account from Charles $90,000 and Georgia 120,000. Terms 3/10, n/30, F.O.B. destination.
6. On February 4, send checks to Charles for 90,000 less 2% cash discount, and to Georgia for $120,000 less 3% cash discount.
7. On February 13, sold merchandise on account to Franklin $110,000 and Thompson $150,000. Terms 2/10, n/30, F.O.B. shipping point.
8. On February 15, issued credit of $6,000 to Franklin for the merchandise returned.
9. On February 20, received payment in full from Franklin and Thompson before discount period has lapsed.
10. On February 28, the prepaid rent balance was expired.
11. On March 1, paid off notes payable $150,000 (issued in 2019) and associated interest of $7,500 (including $3,500 interest payable on the balance sheet).
12. On March 1, paid rent of $30,000 for one-year term starting from March 1, 2020.
13. On April 15, paid $8,000 cash for office supplies. The company expenses all of the supplies purchased during the year.
14. On June 5, declared cash dividends totaling $30,000.
15. On June 30, paid cash dividends totaling $30,000 to stockholders.
16. On July 1, issued a note of $250,000 to bank (one year, annual interest rate 5%) for cash.
17. On July 15, the company CEO paid $80,000 from her savings bank account to purchase a car for personal use.
18. On August 1, issued common stock 3,000 shares, $10 par, in exchange of a land with a fair market value of $80,000.
19. On September 8, paid utilities expense, $12,000.
20. On October 7, sold merchandise to Utah on account $220,000, term 1/10, n/30, FOB shipping point.
21. On October 16, Utah paid off its balance.
22. On November 9, purchased merchandise from Pensacola $60,000, terms 3/10, n/30.
23. On November 12, returned $3,000 of merchandise to Pensacola and received credit.
24. On November 18, paid off the balance to Pensacola.
25. On December 27, 2020, the company paid the 2020 federal income tax of $12,500 and 2020 property tax of $6,600.
26. On December 28, sold merchandise to Kent on account $90,000, term 1/10, n/30, FOB shipping point.
27. On December 29, purchased merchandise from Hermann $160,000, terms 3/10, n/30.
28. Over the year, daily cash sales were $1,000 on average per day.
29. Over the year, sales and office employees earned $120,000 in salaries and wages, of which $15,000 remained as payable at the end of year.
30. Depreciation expense for the year was $80,000.
31. The utilities bill of $18,000 as of December 31, 2020 is due in January 2021.                                                                                                                                                   
32. The balance of unearned revenues was increased by $12,000 during 2020.
33. Based on its historical data, the bad debts are about 2% of net credit sales (credit sales minus sales discounts and sales returns in the year of 2020).

Additional information available at the end of 2020 is as follows:

1. No insurance policy was effective during the year.
2. After physical counting, the company decided that the ending inventory was $60,000.
3. Charles, Georgia, Pensacola, Franklin, Thompson, and Utah had zero balance on account as of Jan 1, 2020.
4. The company uses the gross method to record its purchases and sales on credit.
5. The company adopts the periodic inventory system. In order to report the purchase activities the firm used the purchases, purchases discounts, and purchase returns & allowances accounts.

Answer 1

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