Question

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, 2021, appears below.

Credits Debits 35,500 43,000 3,000 63,000 23,000 2,500 9,000 92,000 34,500 34,000 53,000 Account Title Cash Accounts receivable Supplies Inventory Notes receivable Interest receivable Prepaid rent Prepaid insurance Office equipment Accumulated depreciation Accounts payable Salaries payable Notes payable Interest payable Deferred sales revenue Common stock Retained earnings Dividends Sales revenue Interest revenue Cost of goods sold Salaries expense Rent expense Depreciation expense Interest expense Supplies expense Insurance expense Advertising expense Totals 3,500 81,000 36,000 7,000 161,000 85,000 20,400 12,500 2,600 4,500 403,000 403,000 Information necessary to prepare the year-end adjusting entries appears below. 1. Depreciation on the office equipment for the year is $11,500. 2. Employee salaries are paid twice a month, on the 22nd for salaries earned from the 1st through the 15th, and on the 7th of the following month for salaries earned from the 16th through the end of the month. Salaries earned from December 16 through December 31, 2021, were $1,550. 3. On October 1, 2021, Pastina borrowed $53,000 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years 4. On March 1, 2021, the company lent a supplier $23,000 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2022. 5. On April 1, 2021, the company paid an insurance company $9,000 for a one-year fire insurance policy. The entire $9,000 was debited to prepaid insurance. 6. $920 of supplies remained on hand at December 31, 2021. 7. A customer paid Pastina $3,500 in December for 1,500 pounds of spaghetti to be delivered in January 2022. Pastina credited deferred sales revenue.

Answer 1

Cash		Entry no
Beginning balance	$                                                   35,500.00
Ending balance	$                                                   35,500.00
Accounts recievable
Beginning balance	$                                                   43,000.00
Ending balance	$                                                   43,000.00
Prepaid rent
Beginning balance	$                                                     2,500.00
Rent payment for current year	$                                                   (1,250.00)	8
Ending balance	$                                                     1,250.00
Rent expense
Beginning balance	$                                                   12,500.00
Rent wrongly accounted as prepaid rent	$                                                     1,250.00	8
Ending balance	$                                                   13,750.00
Prepaid Insurance
Beginning balance	$                                                     9,000.00
9 months insurance wrongly accounted as	$                                                   (6,750.00)	5
prepaid insurance
Ending balance	$                                                     2,250.00
Insurance Expense
Beginning balance	$                                                                 -
9 months insurance wrongly accounted as	$                                                     6,750.00	5
prepaid insurance
Ending balance	$                                                     6,750.00
Supplies
Beginning balance	$                                                     3,000.00
Supplies in hand at year end	$                                                        920.00	6
Ending balance	$                                                     3,920.00
Cost of goods sold
Beginning balance	$                                                   85,000.00
Supplies in hand at year end	$                                                       (920.00)	6
Ending balance	$                                                   84,080.00
Office Equipment
Beginning balance	$                                                   92,000.00
Supplies in hand at year end	$                                                                 -
Ending balance	$                                                   92,000.00
Accumulated depreciation
Beginning balance	$                                                   34,500.00
Depreciation for the year	$                                                   11,500.00	1
Ending balance	$                                                   46,000.00
Depreciation Expense
Beginning balance	$                                                                 -
Depreciation for the year	$                                                   11,500.00	1
Ending balance	$                                                   11,500.00
Salaries payable
Beginning balance	$                                                                 -
Salaries outstanding at year end	$                                                     1,550.00	2
Ending balance	$                                                     1,550.00
Salaries Expense
Beginning balance	$                                                   20,400.00
Depreciation for the year	$                                                     1,550.00	2
Ending balance	$                                                   21,950.00
Interest payable
Beginning balance	$                                                                 -
Interest outstanding at year end( 6 months)	$                                                     3,180.00	3
Ending balance	$                                                     3,180.00
Interest Expense
Beginning balance	$                                                                 -
Interest outstanding at year end( 6 months)	$                                                     3,180.00	3
Ending balance	$                                                     3,180.00
Interest Revenue
Beginning balance	$                                                                 -
Interest outstanding at year end( 10 months)	$                                                     1,533.33	4
Ending balance	$                                                     1,533.33
Interest Recievable
Beginning balance	$                                                                 -
Interest outstanding at year end( 10 months)	$                                                     1,533.33	4
Ending balance	$                                                     1,533.33
There is no need for any adjustment in entry no 7