Question

can someone help me prepare the adjusting trial balance at 12/31/19 and closing entries for 2019

480 Problem 1 (25%): Axle Gear Company produced the following trial balance at the end of December 2019: Axle Gear Company Trial Balance 12/31/19 Cash 8,500 Accounts receivable 32,000 Allowance for uncollectible accounts Inventory 90,000 Prepaid insurance 4,880 Equipment 84,000 Accumulated depreciation 35,000 Notes payable 28,000 Common stock 80,600 Retained earnings 10,000 Sales revenue 600,000 Cost of goods sold 408,000 Salaries and wages expense 115,000 Advertising expense 6,700 Supplies expense 5,000 754,080 754,080 Required: 1) Based on the following information, prepare the adjusting entries required by Axle for 2019 iated on a straight-line basis over seven years, no salvage value is expected b) On 3/1/19, Axle acquired a two-year insurance policy and recorded it in a permanent account. C) The three-year, 5% notes payable were issued on 4/1/19; interest is payable annually on 4/1. d) Salaries and wages are paid every Friday, the last payment in 2019 occurring on Friday, December 27. The weekly payroll has running about $2,400. e) Axle ordered web advertising for December, January, and February, which ran in December. The invoice for $1,500 ($500 per month) has not been recorded yet. At the end of December, there were $1,500 of office supplies still on hand, they had been charged to Supplies expense when purchased.

Answer 1

Requirement 2:

Axle Gear Company
Trial Balance
12/31/2019
Account title	Debit	Credit
Cash	$7,000
Accounts receivable	$32,000
Allowance for uncollectible accounts		$480
Inventory	$90,000
Office supplies	$1,500
Prepaid insurance	$2,847
Prepaid advertisements	$1,000
Equipement	$84,000
Accumulated depreciation		$47,000
Notes payable		$28,000
Interst payable		$1,050
Salaries and wages payable		$1,920
Common stock		$80,600
Retained earnings		$10,000
Sales revenue		$600,000
Cost of goods sold	$408,000
Salaries and wages expense	$116,920
Advertising expense	$7,200
Supplies expense	$3,500
Depreciation expense	$12,000
Insurance expense	$2,033
Interest expense	$1,050
Total	$769,050	$769,050

Explanations:

a. Depreciation expense = 84,000/7 = $12,000

b. Insurance expense = 4,880 x 10/24 = $2,033

c. Interest expense = 28,000 x 5% x 9/12 = $1,050

d. Salaries and wages expense = 2,400 x 4/5 = $1,920; Assumed that working days are only 5 (Mon-Fri)

e. Prepaid advertisements not recorded. So that cash reduced by $1,500. Prepaid advertisement recorded for two months (Jan & Feb.) and Advertising expenses recorded for Dec. ($500)

f. $1500 reduced from supplies expense and office supplies recorded at $1,500 because supplies still on hand.

Requirement 3:

Date	Account title and explanation	Debit	Credit
12/31/19	Sales revenue	$600,000
	Income summary		$600,000
	[To close revenue accounts]
12/31/19	Income summary	$550,703
	Cost of goods sold		$408,000
	Salaries and wages expense		$116,920
	Advertising expense		$7,200
	Supplies expense		$3,500
	Depreciation expense		$12,000
	Insurance expense		$2,033
	Interest expense		$1,050
	[To close expenses accounts]
12/31/19	Income summary [600,000-550,703]	$49,297
	Retained earnings		$49,297
	[To close income summary account]