The trial balance of People’s Choice Wholesale Company contained the following accounts shown at December 31, the end of the company’s fiscal year.
Adjustment data:
1. Depreciation is $8,000 on buildings and $7,000 on equipment. (Both are operating expenses.)
2. Interest of $4,500 is due and unpaid on notes payable at December 31.
3. Income tax due and unpaid at December 31 is $24,000.
Other data: $15,000 of the notes payable are payable next year.
Instructions
a. Journalize the adjusting entries.
b. Create T-accounts for all accounts used in part (a). Enter the trial balance amounts into the T-accounts and post the adjusting entries.
c. Prepare an adjusted trial balance.
d. Prepare a multiple-step income statement and a retained earnings statement for the year, and a classifi ed at December 31, 2022.
