Prepare the necessary adjusting journal entries on June 30, 2020
Extracted text: Trial Balance as at June 30, 2020 Dr $ Cr $ 127,000 151,000 Cash Accounts Receivable Allowance for Bad-Debts 12,500 Merchandise Inventory Store Supplies Prepaid Insurance Prepaid Rent Furniture & Fixtures 187,500 58,000 72,000 56,000 800,000 Accumulated Depreciation: Furniture & Fixtures Computer Equipment Accumulated Depreciation: Computer Equipment Accounts Payable Salaries Payable Interest Payable 256,000 450,000 133,500 27,000 82,000 360,000 Unearned Sales Revenue Long-Term Loan Eva Ready, Capital Eva Ready, Withdrawals Sales Revenue 898,500 104,000 1,043,000 Sales Discount 7,000 5,500 Sales Returns & Allowances Cost of Goods Sold 403,000 165,000 Salaries Expense Insurance Expense Utilities Expense Rent Expense Depreciation Expense – Furniture & Fixtures Depreciation Expense – Computer Equipment Store Supplies Expense Gain on Disposal of Old Computer Equipment Bad-Debt Expense Interest Expense 87,500 126,000 14,000 27,000 Total 2,826,500 2,826,500
Extracted text: The following additional information is available at June 30, 2020: (i) Store Supplies on hand at June 30, 2020 amounted to $25,000. (ii) Insurance of $72,000 was paid on May 1, 2020 for the 6-months to October 31, 2020 (iii) Rent was paid on March 31, 2020 for the 4-months to July 31, 2020. (iv) The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $160,000. (v) The computer equipment was acquired on March 31, 2020 and is being depreciated over 5 years on the double-declining balance method of depreciation, down to a residue of $30,000 (vi) Salaries earned by employees not yet paid amounted to $14,000 at June 30, 2020. (vii) Accrued interest expense as of June 30, 2020, $9,000. (viii) At June 30, 2020, $48,000 of the previously unearned sales revenue had been earned (ix) The aging of the Accounts Receivable schedule at June 30, 2020 indicated that the Allowance for Bad Debts should be $19,500 (x) After making all other adjustments, a physical count of inventory was done, which reveals that there was $186,000 worth of inventory on hand at June 30,2020 Other data: (xi) The business is expected to make principal payments totalling $90,000 towards the loan during the fiscal year to June 30 ,2021