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accounting- adjusting and closing entries

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solution


Question

Big Ed's Motorcycle Shop is nearing the fiscal year-end. You have been asked to prepare the adjusting and closing entries to prepare the books for the 2008 year-end.;Download Big Ed's trial balance to begin preparing your adjusting and closing entries;Big Ed's Motorcycle Shop Trial Balance;Following is the information you will need to make your adjusting entries;Office equipment has a life of five years with no residual value.;Store equipment has a life of five years with no residual value.;Shop equipment has a life of ten years with no residual value (assume new equipment was purchased Jan. 1.);A physical inventory of Merchandise Inventory, Parts revealed an actual balance of $97,000.;A physical inventory of Merchandise Inventory, Motorcycles revealed that the balance was accurate.;Office supplies in the amount of $1,500 were used throughout the year.;Salaries should be accrued as follows;Sales - $3,000;Service - $5,000;Office - $1,500;Insurance in the amount of $1,200 was used throughout the year.;Interest on the Note Payable is 8% (assume new note was taken out on Jan. 1.);Use straight line depreciation. Calculate the depreciation using the asset balance and ignore the balance in Accumulated Depreciation. Assume that no expense has been recorded for the year.

 

Paper#80778 | Written in 18-Jul-2015

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