SABRINA CORPORATION UNADJUSTED TRIAL BALANCE DECEMBER 31,

NOTE: All revenue, expense, gain and loss figures above are before tax.
This company uses a Periodic Inventory system.
 
 
1. There was a customer that has gone bankrupt in 2019 and will not pay his $4480 account. This has not been recorded yet.
 
Also, Sabrina Corp. uses the allowance method to record Bad Debts based on an estimate of 4% of ending Accounts Receivable.
 
2. The Office Building is depreciated at a rate of 5% of cost per year.
 
The Office Equipment is depreciated straight line and has a residual value of $5,000 . It was purchased on March 1, 2019
and it is estimated to have a useful life of 6 years.
 
3. A one year 6% note payable of $60,000 was signed on October 1, 2019.
 
4. On December 1, 2019, a customer signed a 5% note receivable for $30,000 due in 90 days.
 
5. FV- NI Short term investments have a fair market value of $32,300 on December 31, 2019. Investments need to
be recorded at fair market value at year end and any gain or loss is recorded on the Income Statement.
 
6. The insurance expense includes : Policy A, cost of $12,700, three year term, paid in advance on April 1, 2019
AND Policy B, cost of $3,756, two year term paid in advance on June 1, 2019.
 
7. The company performed a year end physical count of its inventory as at December 31, 2019.
The amount of inventory on hand at December 31, 2019 amounted to $421,200.
Inventory is maintained on a PERIODIC basis. Therefore the year end inventory adjustment is required.
 
 
a. Prepare the Adjusting Journal Entries required for the 2019 fiscal year at December 31, 2019.
b. Prepare a detailed multi-step income statement (including detailed EPS presentation) for the year ended December 31, 2019.
 
   NOTE: Assume that the tax rate was 30%.    
 
Also, in 2019 common stock was issued as follows:
20,000 commons shares were issued on April 1 and 30,000 commons shares were issued on August 1.
The amount of common stock outstanding at the beginning of the year (January 1, 2019) was 50,000 shares.