Question

Flash Company's trial balance at November 30,2020, is presented below. Flash Company uses a periodic inventory system (With FIFO cost flow method).

Additional information:

1. A record stated that beginning inventory on December 1 should be 602 units.

2. Interest expense on the bank note on December 1 has not yet been accrued.

3. Depreciation expense for the month is $ 4,500 for building and $ 3,500 for equipment.

4. Prepaid insurance of $ 600 expired in December.

5. Unearned revenue of $ 15,000 was earned during the month.

6. Amortization expense for the month $ 500.

7. Recorded bad debts expense based on the aging of accounts receivable, as follows:

Requirements:

1. Journalize and post normal monthly transactions to general ledger accounts in T accounts.

2. Prepare a trial balance as at December 31,2020 . (Hint: Assets first in order of liquidity).

3. Journalize and post adjusting entries in the same T accounts as requirement #1 above.

4. Prepare an adjusted trial balance as at December, 2020 .

5. Generate income statement, statement of owner's equity, and classified balance sheet for the year ended December 31, 2020. (Note: November 30, 2020 Trial Balance represents the accumulated revemue and expenses of the first 11 months in 2020. Tax rate: 0% - There is no tax expense).

6. Journalize and post closing entries in the same T accounts in requirement #1 above.

7. Prepare a post closing trial balance as at December, 2020 .