The trial balance for Cozy Fireplaces Inc for December 31

#3665
The trial balance for Cozy Fireplaces Inc. for December 31, 2011, follows:Additional information
for adjusting entries:1. The deposits from customers were for future deliveries. As of December
31, three-quarters of these goods had been delivered.2. There is $2,000 in salaries and wages
owed at year end.3. Rent is paid in advance on the last day of each month. There was a
balance of $3,000 in the prepaid rent account on January 1, 2011. At the end of January,
$3,000 was paid for the February rent and was debited to the prepaid rent account. All the rent
payments during the year were treated the same way. The rent for July to December increased
to $4,000 per month.4. A count of the office supplies at year end revealed that $500 of supplies
were still on hand.5. The building is being depreciated over 20 years with a residual value of
$20,000.6. The bank loan was taken out on April 1, 2011. The first interest payment is due on
April 1, 2012.7. Income tax for the year should be calculated using a tax rate of 30%. (Hint: After
you finish the other adjusting entries, you will have to determine the income before income tax
and then calculate the tax as 30% of this amount.)Required:Prepare the adjusting entries for the
year 2011.View Solution:
The trial balance for Cozy Fireplaces Inc for December 31

ANSWER
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