prepare the adjusting entries to record the preceding information 562553

Adjusting Entries Your examination of the records of the Sullivan Company provides the following information for the December 31, 2007 year end adjustments:

1. Bad debts are to be recorded at 2% of sales. Sales totaled $25,000 for the year.

2. Salaries at year end that have accumulated but have not been paid total $1,400.

3. Annual straight line depreciation for the company’s equipment is based on a cost of $30,000, an estimated life of eight years, and an estimated residual value of $2,000.

4. Prepaid insurance in the amount of $800 has expired.

5. Interest that has been earned but not collected totals $500.

6. Unearned rent in the amount of $1,000 has become earned.

7. Interest on a note payable that has accumulated but has not been paid totals $600.

8. The income tax rate is 30% on current income and is payable in the first quarter of 2008. The pretax income before the preceding adjusting entries is $6,800.


Prepare the adjusting entries to record the preceding information.

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