ADJUSTING ENTRIES

1.

Accounts Receivable
Cash
NSF check

5,000

Supplies

3,000

5,000

Cash
Unrecorded voucher
2.

3.

4.

5.

6.

7.

8.

Accounts Receivable
Cash
Returned check

1,500

Trading Securities
Unrealized gain - TS
Increased in market value

1,000

Held to maturity
Unrealized gain - HTM

4,500

Bad debts expense

Allowance for bad debts
Set up allowance for bad debts

7,925

10
.

11
.

12
.

13
.

14
.

1,500

1,000

4,500

7,925

Inventory, end
Income summary

576,000

Purchases
Accounts payable

4,000

Inventory
Income summary

4,000

Income summary
Inventory

3,000

Accumulated depreciation
Loss on sale of equipment
Equipment

4,500
500

Depreciation Expense
Accumulated depreciation
9.

3,000

Insurance Expense
Prepaid expense
Adjustment for insurance

576,000

4,000

4,000

3,000

5,000
17,200
17,200
750
750

Salaries & Wages

Accrued expense
To record salaries & wages expense

1,300

Prepaid Expense
Rent expense
Adjustment for rent expense

1,000

Interest Expense
Prepaid Expense

1,300

1,000

100
100

Accumulated surplus
Goodwill

50,000

Accumulated surplus

30,000

50,000

Dividends payable
15
.

Accumulated surplus
Accumulated surplus - appropriated

30,000
30,000
30,000

STATEMENT OF FINANCIAL POSITION

AS OF JUNE 30, 2016

CURRENT ASSETS
Cash

85,500

Trading Securities

21,000

Accounts Receivable

218,500

Allowance for bad debts

(10,925)

Inventories

207,575
576,000

Prepaid expenses
TOTAL CURRENT
ASSETS

11,150
901,225

NON-CURRENT ASSETS
Held to maturity
Equipment
Accumulated
Depreciation

125,000
157,000
(57,700)

TOTAL NON-CURRENT ASSETS

TOTAL ASSETS

99,300
224,300
1,125,525

CURRENT LIABILITIES
Accounts Payable

266,000

Accrued Expenses

16,300

Income Tax Payable

16,768

Dividends Payable

30,000

Interest Payable

22,000

Notes Payable

10,000

TOTAL CURRENT LIABILITIES

361,068

LONG-TERM LIABILITIES
Loans Payable
TOTAL LONG-TERM
LIABILITIES

250,000
611,068

SHAREHOLDERS' EQUITY
Share Capital
Share Premium

300,000
16,000

Accumulated surplus
Accumulated surplus appropriated

168,457

TOTAL SHAREHOLDERS' EQUITY

514,457

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY

30,000
1,125,525

ANNABEL CORPORATION
STATEMENT OF FINANCIAL PERFORMANCE
FOR THE YEAR ENDED JUNE 30, 2016

Sales

2,160,000

Cost Of Goods Sold

Gross Profit
Operating Expenses
Income From Operations
Other Income
Other Charges
Income Before Taxes

(1,339,000)
821,000
(500,175)
320,825
23,000
(204,600)
139,225

Provision For Income Tax

(41,768)

Net Income
Accumulated Profits, Beginning
Adjustments
Dividends Declared

97,457
180,000
(49,000)
(30,000)

Accumulated Profits Restricted

Accumulated Profits,
Ending

(30,000)
168,457

Cash
95,000

5,000
3,000
1,500
9,500

1)
2)

95,000
85,500

Accounts receivable
212,000
1)
5,000
2)
1,500
218,500

Allowance for bad debts

3,000
4)
7,925
10,925

Inventory
576,000

Prepaid expenses
11,000
11)
750
1,000
12)
100
11,150

Trading securities
20,000
3)
1,000
21,000
Accumulated depreciation
8)
4,500
45,000
8)
17,200
57,700

9)

Held to maturity
120,000
3)
5,000
125,000

Accounts payable
262,000
6)
4,000
266,000

Goodwill
50,000
13)
0

Accrued expenses
15,000
10)
1,300
16,300

Dividends payable

50,000

Interest payable
22,000

Loans payable

Notes payable

14)

30,000

250,000

Ordinary shares
300,000

Share premium
16,000

Sales

10,000
Accumulated surplus
50,000
180,000
14)
30,000
1,000
15)
30,000
97,457
168,457
13)

Interest income
17,000

2,160,000

Purchases
1,392,000
6)

4,000
1,396,000
Salaries & wages
312,000
10)
1,300
313,300

Light & water

75,000

Supplies
1)

Miscellaneous expenses
179,000

30,000
3,000
33,000
Rent
13,000
12,000

11)

1,000

4)

Insurance expense
9)

750

Advertising
40,000

Interest expense
25,000
100
25,100

Bad debts expense

7,925

Unrealized gain
3)

Depreciation expense

1,000
5,000
6,000

Loss on sale of equipment

8)

8)

17,200

500