90.2K

Verified Solution

Link Copied!

Pastina Company sells various types of pasta to grocery chains as private label brands. The company's reporting year-end is December 31. The unadjusted trial balance as of December 31, 2024, appears below. Information necessary to prepare the year-end adjusting entries appears below. 1. Depreciation on the office equipment for the year is $10,000. 2. Employee salaries are paid twice a month, on the 22 nd for salaries earned from the 1 st through the 15 th, and on the 7 th of the following month for salaries earned from the 16th through the end of the month. Salaries earned from December 16 through December 31, 2024, were $1,500. 3. On October 1, 2024, Pastina borrowed $50,000 from a local bank and signed a note. The note requires interest to be paid annually on Sepeember 30 at 12%. The principal is doe in 10 years. 4. On March 1, 2024, the company lent a supplier $20,000, and a note was signed requiring principal and interest at 8% to be paid on February 28, 2025. 5. On April 1, 2024, the company paid an insurance company $6,000 for a one-year fire insurance policy. The entire $6,000 was debited to prepaid insurance at the time of the payment. 6. $800 of supplies remained on hand on December 31,2024. 7. The company received $2,000 from a customer in December for 1,500 pounds of spaghetti to be delivered in January 2025. Pastina credited deferred sales revenue at the time cash was received. 8. On December 1, 2024, $2,000 rent was paid to the owner of the building. The payment represented rent for December 2024 and January 2025 at $1,000 per month. The entire amount was debited to prepaid rent at the time of the payment. Required: Prepare the necessary December 31, 2024, adjusting joumal entries. Refer to P 2-3 and complete the following steps: 1. Enter the unadjusted balances from the trial balance into T-accounts. 2. Post the adjusting entries prepared in P23 to the accounts. 3. Prepare an adjusted trial balance. 4. Prepare an income statement and a statement of shareholders' equity for the year ended December 31, 2024. and a classified balance sheet as of December 31, 2024. Assume that no common stock was issued during the year and that $4,000 in cash dividends were paid to sharebolders during the year. 5. Prepare closing entries and post to the accounts. 6. Prepare a post-closing trial balance

Answer & Explanation Solved by verified expert

See Answer