(Solution Download) TREVOR CORPORATION Balance Sheet December 31, 2013 Cash $ 30,000 Accounts payable $ 13,750 Inventory


TREVOR CORPORATION Balance Sheet December 31, 2013 Cash $ 30,000 Accounts payable $ 13,750 Inventory 30,750 Interest payable 2,500 Prepaid insurance 5,600 Bonds payable 50,000 Equipment 38,000 Common stock 25,000 $104,350 Retained earnings 13,100 $104,350 During 2014, the following transactions occurred. 1. Trevor paid $2,500 interest on the bonds on January 1, 2014. 2. Trevor purchased $241,100 of inventory on account. 3. Trevor sold for $480,000 cash inventory which cost $265,000. Trevor also collected $28,800 sales taxes. 4. Trevor paid $230,000 on accounts payable. 5. Trevor paid $2,500 interest on the bonds on July 1, 2014. 6. The prepaid insurance ($5,600) expired on July 31. 7. On August 1, Trevor paid $10,200 for insurance coverage from August 1, 2014, through July 31, 2015. 8. Trevor paid $17,000 sales taxes to the state. 9. Paid other operating expenses, $91,000. 10. Redeemed the bonds on December 31, 2014, by paying $48,000 plus $2,500 interest. 11. Issued $90,000 of 8% bonds on December 31, 2014, at 103. The bonds pay interest every June 30 and December 31. Adjustment data: 1. Recorded the insurance expired from item 7. 2. The equipment was acquired on December 31, 2013, and will be depreciated on a straight-line basis over 5 years with a $3,000 salvage value. 3. The income tax rate is 30%. (Hint: Prepare the income statement up to income before taxes and multiply by 30% to compute the amount.) Instructions (You may want to set up T-accounts to determine ending balances.) 1. Prepare journal entries for the transactions listed above and adjusting entries. 2. Prepare an adjusted trial balance at December 31, 2014. Totals $687,695 I just need closing entries! i have everything else!

 







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