Question

Check my w 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. Account Title Debits Credits Cash 50,900 Accounts receivable 20,000 Supplies Prepaid rent Inventory Office equipment Accumulated depreciation-office equipment Accounts payable Salaries and wages payable Note payable 45,000 55,000 7,150 20,000 2,e0e 27,000 5e,eee 12,000 185,000 Common stock Retained earnings Sales revenue 97,500 Cost of goods sold Interest expense Salaries and wage expense 20,350 9,200 1.200 Rent expense Supplies expense Next 7,150 20,000 2,000 27,000 50,000 12,000 185,000 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 97,500 20,350 9,200 1,200 Rent expense Supplies expense Utility expense 4,000 Totals 303,150 303,150 Cash dividends paid to shareholders during the year amounted to $3,750. 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 Prey ork i Saved Help Save & Exit Subm Check my work Cash dividends paid to shareholders during the year amounted to $3,750. 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 salarles and wages at year-end should be $3,000. 3. The company borrowed $27,000 on September 1, 2018. The principal is due to be repald 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 $300. 5. Prepald rent at year-end should be $600. 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

Excalibur Corporation Income Statement For year ended Dec 31 Sales 185,000 Cost of goods sold 97,500 Gross Profit (Loss) 87,500 Operating expenses Salaries & Wages expense 21,350 Rent expense 8,600 Supplies expense 900 Utilties expense 4,000 Depreciation expense 6,875 Total Operating expenses 41,725 Operating Income (Loss) 45,775 Interest expense 900 Net Income 44,875

Excalibur Corporation Statement of changes in equity For year ended Dec 31 Common Stock Retained Earnings Total Equity Beginning balance 50,000 62,000 12,000 Net Income 44,875 44,875 Ending Balance 50,000 56,875 106,875

Excalibur Corporation Balance Sheet As of Dec 31 Liabilities & Stockholders Equity Assets Current Liabilities Current Assets 50,900 Accounts Payable 20,000 Salaries & Wages Payable 300 Interest Payable Cash 20,000 Accounts Receivable 3,000 Supplies 900 Prepaid Rent 600 45,000 Inventory Total Current Assets 116,800 Total Current Liabilities 23,900 Non-Current Liabilities Non-Current Assets 55,000 Notes Payable (14,025) 40,975 Total Liabilties Office Equipment 27,000 Accumulated Depreciation-Office Equipment Total Non-Current Assets 50,900 Stockholders Equity Common Stock 50,000 Retained earnings Total Stockholders Equity 56,875 106,875 157,775 Total Liabilities & Stockholders Equity Total Assets 157,775

Excalibur Corporation Debit Credit Calculation Date Account Closing entries $185,000 31-Dec Sales Revenue $185,000 Income Summary $140,125 31-Dec Income Summary Cost of goods sold $97,500 Interest expense 900 Salaries & Wages expense $21,350 Rent expense 8,600 Supplies expense 900 Utilties expense 4,000 Depreciation expense 6,875 $ 44,875 31-Dec Income Summary =185,000-140,125 Retained Earnings $44,875

Excalibur Corporation Adjusted TB Unadjusted TB Adjustments Income Statement Balance Sheet Credit Debit Credit Debit Credit Debit Debit Credit Debit Credit Account Names Cash 50,900 50,900 50,900 Accounts Receivable 20,000 20,000 20,000 Supplies 300 300 300 Prepaid Rent 600 600 600 45,000 Inventory 45,000 45,000 Office Equipment 55,000 55,000 55,000 Accumulated Depreciation-Office Equipment Accounts Payable 6,875 7,150 14,025 14,025 20,000 20,000 20,000 Salaries & Wages Payable 1,000 3,000 3,000 2,000 Interest Payable 900 900 900 Notes Payable 27,000 27,000 27,000 Common Stock 50,000 50,000 50,000 Retained Earnings 12,000 12,000 12,000 Dividends Sales Revenue 185,000 185,000 185,000 Cost of goods sold 97,500 97,500 97,500 Interest expense 900 900 900 Salaries & Wages expense 1,000 21,350 20,350 21,350 9,200 Rent expense 600 8,600 8,600 Supplies expense 1,200 300 900 900 Utilties expense 4,000 4,000 4,000 Depreciation expense 6,875 6,875 6,875 Totals 303,150 303,150 311,925 311,925 9,675 9,675 140,125 185,00o0 171,800 126,925 Net Income (Loss) 44,875 44,875 303,150 303,150 Adjusted Total 311,925 9,675 9,675 311,925 185,000 185,000 171,800 171,800