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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