Identifying AdjustingEntriesfro m Unadjuste d Tri al Balance
In its annual report, Hewlett-Packard Company slates , “We are a leading global provider of products. technologies. solutions and services to individual consumers. small- and medium-sized businesses, and large enterprises. including customers in the public and education sectors.” Its offerings span personal computing and other access drivers, imaging and printing-related products and services, enterprise information technology infrastructure, and multi-vendor customer services. Following is a trial balance listing accounts that Hewlett-Packard uses. Assume that the balances are unadjusted at the end of a recent fiscal year ended October 31.
HEWLETT-PACKARD COMPANY Unadjusted Trial Balance (dollars in millions) | ||
| Debit | Credit |
Cash | $10,200 |
|
Short-term investments | 100 |
|
Accounts receivable | 19,300 |
|
Inventory | 7,900 |
|
Other current assets | 14,400 |
|
Property, plant, and equipment | 18,900 |
|
Accumulated depreciation |
| $8,100 |
Other assets | 50,700 |
|
Short-term note payable |
| 10,100 |
Accounts payable |
| 14,100 |
Accrued liabilities |
| 17,300 |
Deferred revenue |
| 6,200 |
Income tax payable |
| 900 |
Long-term debt |
| 7,700 |
Other liabilities |
| 17,000 |
Contributed capital |
| 14,000 |
Retained earnings |
| 17,800 |
Product revenue |
| 91,700 |
Service revenue |
| 26,300 |
Interest expense |
| 400 |
Cost of products | 69,300 |
|
Cost of services | 20,300 |
|
Interest expense | 300 |
|
Research and development expense | 3,600 |
|
Selling, general, and administrative expense | 13,100 |
|
Other expense | 1,400 |
|
Income tax expense | 2,100 |
|
Total | $231,600 | $231,600 |
Required:
1. Based on the information in the unadjusted trial balance . list types of adjustments on the balance sheet that may need to be adjusted at October 31 and the related income statement account for each (no computations arc necessary). You may need to make assumptions.
2. Which accounts should be closed at the end of the year? Why?
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