The following are the unadjusted balances in the accounts of (Name of Student) Trading Ltd. for the fiscal year ended

The following are the unadjusted balances in the accounts of (Name of Student) Trading Ltd. for the fiscal year ended 9/30/2011

$

Cash 28,750 Accounts receivable 32,900

Prepaid insurance 4,800 Stores supplies 12,400

Inventory 36,000 Stores equipment 32,300

Acc. Depreciation – Stores equipment 9,300 Manufacturing equipment 98,500

Acc. Depreciation – Manufacturing equipment 23,850 Accounts payable 15,430

Notes payable 50,000 Unearned revenue 33,000

Common stock 90,000 Dividends paid 15,000

Retained earnings ? Sales 185,700

Dividend received on investment 6,450 Sales discounts 10,100

Sales returns and allowances 2,095 Purchases 98,000

Purchases returns and allowances 9,250 Transportation-in 3,250

Transportation-out 1,820 Salaries expense 30,425

Rent expense 18,000 Advertising expense 7,600

Utilities expense 5,900

(The company uses a periodic inventory system).

Required:

1. Prepare the adjusting entries to reflect the items below, using a work sheet.

a) Stores supplies still available at the year end is $3,800

b) Expired insurance for the year is $3,600

c) Depreciation expense on store equipment is $2,550 for the year.

d) Depreciation expense for manufacturing equipment is 12.5% of the book balance.

e) A physical check reveal that $21,000 of inventory is in warehouse at fiscal year end.

f) $20,000 of the balance in unearned income was earned in the fiscal year.

g) Interest on notes payable is 12% per annum. The $50,000 note was a bank loan taken on 2/15/2011 to be repaid in full in twelve months.

(You may need to add some more accounts).

2. Prepare closing entries, a multi-step income statement and a statement of retained earnings for the company.

3. Prepare a balance sheet, in classical form, as at 9/30/2011