Answer to Question #238686 in Management for Gundo

Question

Some selected balances of DD Co. for year ended Dec-31-2019 are as follows with their

normal balances before adjustments:

Cash and Cash Equivalent Br 20,000 Owners’ Capital 40,000

Notes Receivables 45,000 Retained Earnings 75,000

Office Supplies 12,000 Sales Revenues 640,000

Prepaid Insurance 72,000 Interest Income 12,000

Inventory (Average Cost) 24,000 Cost of Goods Sold 320,000

Fixed Assets 120,000 Selling Expenses 21,000

Accum. Depr- Fixed assets 36,000 Salary and Wages Expense 105,000

Unearned Rent (Liability) 56,000 Rent Expense 15,000

Required

v. Depreciation Expenses allocated for the year amounts to be Br 15,000

vi. There are accrued interest of Br 8,000 on the notes receivable

b. Prepare the following Financial Statements after adjustments on Dec-31- 2019.

i. Balance Sheet ii. Income Statement

c. Prepare closing journal entries after balances are adjusted and show the final closing of

Income Summary to Retained Earnings

Answer 1

Owners' Capital Br 20,000

Cash and Cash Equivalent Notes Receivables: 40,000

Retained Earnings: $45,000

75,000 pieces of office equipment

12,000 Dollars in Sales

Prepaid Insurance: 640,000

Interest Income: 72,000

Inventory: 12,000 (Average Cost) 24,000 320,000

Fixed Assets 320,000

Cost of Goods Sold 21,000

Accum. 120,000

Selling Expenses 120,000

Selling Expenses 120,000

Selling Expenses 120,000

Selling Exp Salary and Wages Expense 105,000

Depr- Fixed assets 36,000

Rent Expense 15,000

Unearned Rent (Liability) 56,000