Reference no: EM131709298

xcalibur Corporation sells video games for personal computers.

The unadjusted trial balance as of December 31, 2018, 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
Supplies	0
Prepaid rent	0
Inventory	65,000
Office equipment	75,000
Accumulated depreciation-office equipment		10,000
Accounts payable		26,100
Salaries and 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
Salaries and wages expense	32,350
Rent expense	14,000
Supplies expense	2,000
Utility expense	6,000
Totals	345,150	345,150

Cash dividends paid to shareholders during the year amounted to $6,000.

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

1. The office equipment was purchased in 2016 and is being depreciated using the straight-line method over an eight-year useful life with no salvage value.

2. Accrued salaries and wages at year-end should be $4,500.

3. The company borrowed $30,000 on September 1, 2018. 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%.

4. The company debits supplies expense when supplies are purchased. Supplies on hand at year-end cost $500.

5. Prepaid rent at year-end should be $1,000.

1. Complete the worksheet below.
2-a. Use the information in the worksheet to prepare an income statement for 2018.
2-b. Use the information in the worksheet to prepare a statement of shareholders' equity for 2018.
2-c. Use the information in the worksheet to prepare a balance sheet as of December 31, 2018.
3. Prepare the necessary closing entries assuming that adjusting entries have been correctly posted to the accounts.