Biology Forums - Study Force

Underwater Adventures has the following account balances on August 31, 2014:

   Accounts payable   $8,800
   Accounts receivable   9,600
   Accumulated amortization - equipment   30,300
   Cash   2,200
   Cost of goods sold   341,500
   Jacobson, capital   190,700
   Jacobson, withdrawals   44,000
   Equipment   88,000
   Interest earned   2,000
   Inventory   71,500
   Operating expenses   175,500
   Sales discounts   3,100
   Sales returns and allowances   14,400
   Sales revenue   520,600
   Supplies   7,100
   Unearned sales revenue   4,500

The following information as at August 31, 2014 was also available:

a.   A physical count of items showed $1,200 of supplies on hand.
b.   An inventory count showed inventory on hand of $66,400.
c.   The equipment has an estimated useful life of eight years and is expected to have no salvage value.
d.   Unearned sales revenue of $1,000 was earned.

Required:
1.   Prepare the necessary adjusting journal entries at August 31, 2014. For simplicity all operating expenses are combined into a single operating expense account for financial statement purposes. Use the normal account name for the adjusting journal entries.
2.   Prepare a classified balance sheet based on adjusted account balances.

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