Prepare and complete the worksheet below use the

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Reference no: EM13572060

Excalibur Corporation manufactures and sells video games for personal computers. The unadjusted trial balance as of December 31, 2011, appears below. December 31 is the company's fiscal year-end. The company uses the perpetual inventory system.

Account Title	Debits	Credits
Cash	23,300
Accounts receivable	32,500
Allowance for uncollectible accounts		100
Supplies	0
Prepaid rent	0
Inventory	65,000
Equipment	75,000
Accumulated depreciation-equipment		10,000
Accounts payable		26,000
Wages payable		3,000
Note payable		30,000
Common stock		80,000
Retained earnings		16,050
Sales revenue		180,000
Cost of goods sold	95,000
Interest expense	0
Wage expense	32,350
Rent expense	14,000
Supplies expense	2,000
Utility expense	6,000
Bad debt expense	0

Totals	345,150	345,150

Information necessary to prepare the year-end adjusting entries appears below.

1.	The equipment was purchased in 2009 and is being depreciated using the straight-line method over an eight-year useful life with no salvage value.
2.	Accrued wages at year-end should be $4,500.
3.	The company estimates that 2% of all year-end accounts receivable will probably not be collected.
4.	The company borrowed $30,000 on September 1, 2011. The principal is due to be repaid in 10 years. Interest is payable twice a year on each August 31 and February 28 at an annual rate of 10%.
5.	The company debits supplies expense when supplies are purchased. Supplies on hand at year-end cost $500.
6.	Prepaid rent at year-end should be $1,000.

Prepare and complete the worksheet below. Use the information in the worksheet to prepare an income statement and a statement of shareholders' equity for 2011 and a balance sheet as of December 31, 2011. Cash dividends paid to shareholders during the year amounted to $6,000. Also prepare the necessary closing entries assuming that adjusting entries have been correctly posted to the accounts.

Reference no: EM13572060

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