Alphabet Ltd. - Balance Sheet as of December 31, 2022
Assets
Cash 100,000
Accounts Receivable 80,000
Merchandise Inventory 44,000
Prepaid Rent 6,000
Equipment 100,000
Accumulated depreciation
of Equipment (10,000)
Liabilities and Owners Equity
Accounts Payable 40,000
Notes Payable 40,000
Total Liabilities 80,000
Paid-in Capital 160,000
Retained Earnings 80,000
Total Owners Equity 240,000
TOTAL LIABILITIES +
OWNERS EQUITY 320,000
During the 2023 fiscal year, the company undertook the following transactions:
1. January 8th. The company collected all outstanding accounts receivable from 2022.
2.1. March 31st. The prepaid rent on the balance sheet at the end of 2022 was used for the
rent of the warehouse of the first 3 months of 2023.
2.2. April 2nd
. Alphabet paid $24,000 to its property owner in advance for the rent ($18,000
for the last 9 months of 2023 and the rest for the first 3 months of 2024).
3. April30th
. During the first quarter of the year, the company had cash sales of $200,000.
4. December 31st. Total wages expense in 2023 amounted to $80,000 but only $70,000
had been paid by the year-end.
5. December 31st. The ending balance of merchandise inventory on December 31st, 2022,
was $35,000.
Required: (Solve the exercise on the ANSWER SHEET)
a) Prepare the journal entries and the general ledger entries for the 2023 fiscal year.
(Note that some adjustments may be needed) (5+2 points).
b) Prepare the Trial Balance as of December 31, 2023. (2 points).
