account balances taken from the ledger of builders supply corpo 239280

Account balances taken from the ledger of Builders’ Supply Corporation on December 31, 2011, before adjustment, follow information relating to adjustments on December 31, 2011:

(a) Allowance for Bad Debts is to be increased to a balance of $3,000.

(b) Buildings are depreciated at the rate of 5% per year.

(c) Accrued selling expenses are $3,840.

(d) There are supplies of $780 on hand.

(e) Prepaid insurance relating to 2012 totals $720.

(f) Accrued interest on long-term investments is $240.

(g) Accrued real estate and payroll taxes are $900.

(h) Accrued interest on the mortgage is $480.

(i) Income taxes are estimated to be 20% of the income before income taxes.

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 24,000

Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,000

Allowance for Bad Debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,380

Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,570

Long-Term Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,400

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69,600

Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,000

Accumulated Depreciation—Buildings . . . . . . . . . . . . . . . . . . . . . . . . 19,800

Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,000

Mortgage Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68,800

Capital Stock, $10 par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180,000

Retained Earnings, December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . 14,840

Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,400

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246,000

Sales Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,360

Sales Discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,400

Cost of Goods Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114,370

Selling Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,440

Office Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,680

Insurance Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,440

Supplies Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,200

Taxes—Real Estate and Payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,980

Interest Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 660

Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,640

Instructions:

1. Prepare a trial balance.

2. Journalize the adjustments.

3. Journalize the closing entries.

4. Prepare a post-closing trial balance.

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