Question: Refer to P3-4B.
Required: Complete the following steps:
1. Enter the unadjusted balances from the trial balance into T-accounts.
2. Post the adjusting entries prepared in P3-4B to the accounts.
3. Prepare an adjusted trial balance.
4. Prepare an income statement and a statement of shareholders' equity for the year ended December 31, 2012, and a classified balance sheet as of December 31, 2012. Assume that no common stock is issued during the year.
5. Record closing entries.
6. Post closing entries to the accounts.
7. Prepare a post-closing trial balance.
P3-4B: Jaguar Auto Company provides general car maintenance to customers. The company's fiscal year-end is December 31. The December 31, 2012, trial balance (before any adjusting entries) appears below.
Information necessary to prepare the year-end adjusting entries appears below.
a. Depreciation on the machines for the year is $9,000.
b. Employee salaries are paid every two weeks. The last pay period ended on December 23. Salaries earned from December 24 through December 31, 2012, are $3,000.
c. On September 1, 2012, Jaguar borrows $30,000 from a local bank and signs a note. The note requires interest to be paid annually on August 31 at 9%. The principal is due in five years.
d. On March 1, 2012, the company purchases insurance for $18,000 for a one-year policy to cover possible injury to mechanics. The entire $18,000 is debited to Prepaid Insurance at the time of the purchase.
e. $4,000 of supplies remains on hand at December 31, 2012.
f. On December 30, Jaguar receives a utility bill of $1,700 for the month. The bill will not be paid until early January 2013, and no entry is recorded when the bill is received.
Required: Prepare the necessary adjusting entries on December 31, 2012.