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Posted by: Homeworkhelp
Price Quoted by Student: $4
Posted On: 2011-09-12 08:08:53
 
Question

P 2-8 Excalibur Corporation manufactures and sells video games for personal computers.

 

ANSWER KEY P 2-8 Adjusting entries.

 

Excalibur Corporation manufactures and sells video games for personal computers.

 

Excalibur Corporation manufactures and sells video games for personal computers. The unadjusted trial balance as of December 31, 2011, appears below. December 31 is the company's fiscal year-end. The company uses the perpetual inventory system.

 

Information necessary to prepare the year-end adjusting entries appears below.

 

1. The equipment was purchased in 2009 and is being depreciated using the straight-line method over an eight-year useful life with no salvage value.

2. Accrued wages at year-end should be $4,500.

3. The company estimates that 2% of all year-end accounts receivable will probably not be collected.

4. The company borrowed $30,000 on September 1, 2011. The principal is due to be repaid in 10 years. Interest is payable twice a year on each August 31 and February 28 at an annual rate of 10%.

5. The company debits supplies expense when supplies are purchased. Supplies on hand at year-end cost $500.

6. Prepaid rent at year-end should be $1,000.

 

Required:

Prepare the necessary December 31, 2011, adjusting entries.


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