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1. The list of accounts below and the unadjusted balances of these accounts were taken
from the ledger of the Manville Corporation at the end of their accounting period,
March 31, 20X2:
Cash $ 3,995
Accounts Receivable 13,240
Allowance for Doubtful Accounts 120
Inventory—April 1, 20X1 22,800
Prepaid Insurance 360
Supplies on Hand 520
Accumulated Depreciation—Equipment 4,500
Accounts Payable 11,870
Taxes Payable 390
Capital Stock 25,000
Retained Earnings 11,920
Sales Returns and Allowances 920
Sales Discounts 1,330
Purchase Returns and Allowances 490
Purchase Discounts 1,125
Sales Salaries 11,800
Rent Expense 3,600
Advertising Expense 2,700
Utilities Expense 1,880
Maintenance Expense 560
a. Merchandise inventory at March 31, 20X2, was $23,300.
b. The Allowance for Doubtful Accounts should be increased by $600.
c. Prepaid insurance represents a three-year policy purchased April 1, 20X1.
d. Supplies on hand were estimated to be $170 on March 31, 20X2.
e. The cost of the equipment is being depreciated over a 15-year estimated life using
the straight-line method. Salvage value should be ignored.
f. Unpaid sales salaries on March 31, 20X2, amounted to $200.
REQUIRED: 1. Prepare a work sheet. (Adjusted trial balance columns may be omitted.)
2. Prepare an income statement. 3. Prepare a statement of retained earnings. 4. Prepare a
balance sheet. 5. Prepare the closing entries.
2. The trial balance of the Coleman-Foose Company was prepared from the record of the
company on November 30, 20X2, the close of its fiscal year.
November 30, 20X2
Cash $ 12,200
Accounts Receivable 16,300
Allowance for Doubtful Accounts $ 200
Unexpired Insurance 660
Supplies on Hand 265
Accumulated Depreciation—Building 6,000
Office Equipment 6,800
Accumulated Depreciation—Office Equipment 2,100
Accounts Payable 11,400
Mortgage Payable 9,000
Capital Stock 40,000
Retained Earnings 2,200
Sales Returns and Allowances 600
Sales Discounts 2,700
Purchase Returns and Allowances 1,200
Purchase Discounts 2,300
Salaries Expense 23,000
Travel Expense 5,200
Office Expense 1,300
Professional Fee Expense 2,500
Telephone Expense 1,200
Building Repair Expense 800
a. The Allowance for Doubtful Accounts should be increased by $400.
b. Merchandise Inventory at November 30, 20X2, was $16,200.
c. Unexpired Insurance on November 30, 20X2, amounted to $440.
d. Supplies on Hand November 30, 20X2, $120.
e. Building depreciation is calculated at 5% per year.
f. Office depreciation is calculated at 10% per year.
g. Salaries accrued at November 30, 20X2, are $400.
REQUIRED: 1. Prepare a work sheet. (The adjusted trial balance columns are to be omitted.)
2. Prepare an income statement for the year. 3. Prepare closing entries.