Following is the unadjusted trial balance of Baltimore Rentals Corporation at the end of its first year of operations, December 31, 20X5:
AccountDebitCreditCash3,300Accounts receivable4,000Supplies500Truck8,000Acc. dep. – truck0Accounts payable5,000Unearned rent revenue2,400Income taxes payable0Capital Stock7,000Dividends1,000Rent earned16,000Commissions expense1,000Depreciation expense-truck0Supplies expense0Salaries expense7,000Telephone expense0Income tax expense0Rent expense5,60030,40030,400
The following additional information is available:
- A physical count indicates that $300 of supplies is still on hand at December 31.
- The truck was purchased on July 1; it has an estimated useful life of 4 years.
- One day of salaries for December 31 is unpaid; the unpaid amount of $200 will be included in the first Friday payment in January.
- The balance in the Unearned Rent Revenue account represents six months’ rental of warehouse space, effective October 1.
- A $100 bill for December telephone charges has not yet been recorded.
- Income taxes expense for the year is $300. This amount will be paid in the next fiscal year.
- Prepare all necessary adjusting entries at December 31, 20×5.
- Prepare an adjusted trial balance at December 31, 20×5.
- Prepare an income statement, statement of retained earnings, and a balance sheet.
- Prepare and record closing entries including descriptions.
- Each assignment must include a title page and reference page. Review the grading rubric to understand how you will be graded on this assignment. Reach out to your instructor if you have questions about the assignment.