Complete the Trial Balance Adjustments in Accounting
Adjusting Trial Balance in Accounting
Instructions: Complete the missing segments of the trial balance and adjustments based on accounting principles and concepts. Use the information to answer questions 1-10 (you may need to scroll to view all questions associated with the spreadsheet). Do not include the $ symbol in your answer. Be sure to use decimal points correctly. Notes: A credit sale on December 1, 2022 of $2100 has not been recorded on Account Rec. 2% of the Inventory are unsellable and must be disposed. A 5% appreciation of Land value was appraised but not yet recorded. Tesdata issued and paid a check of $5200 to a supplier December 18th, 2022 but not yet recorded. Cost of Goods Sold was erroneously entered as $23,069 instead of $27,123. Wages were overstated by $2345 and Revenue was understated by $12175. Returns on credit sales amount to $245 due to damages. An additional $2367 of interest income was received December 14th, 2022. A prepaid insurance of $325 will be carried over next FY. Tesdata is located in a tax jurisdiction of 6%.
After adjusting the trial balance, the corrected balances for Accounts Receivable, Inventory, Land Appreciation, and Tesdata, Capital should be calculated based on the adjustments made to the accounts.
To address the missing segments in the trial balance and make necessary adjustments, let's first update the trial balance based on the provided information:
Trial Balance as of December 31, 2022:
Cash: $11,000
Accounts Receivable: $?
Inventory: $?
Land: $?
Accounts Payable: $?
Tesdata, Capital: $?
Cost of Goods Sold: $?
Wages Expense: $?
Revenue: $?
Interest Income: $?
Insurance Expense: $?
Sales Returns and Allowances: $?
Land Appreciation: $?
Now, let's make the adjustments:
Accounts Receivable: Add the unrecorded credit sale of $2,100.
Accounts Receivable: $2,100
Inventory: Recognize 2% of inventory as unsellable.
Inventory: ($? * 0.02)
Land: Reflect the 5% land appreciation.
Land Appreciation: $?
Accounts Payable: Record the unrecorded payment to the supplier of $5,200.
Accounts Payable: $5,200
Cost of Goods Sold: Correct the error by adjusting it to $27,123.
Cost of Goods Sold: $27,123
Wages Expense: Adjust for the overstatement by reducing it by $2,345.
Wages Expense: ($? - $2,345)
Revenue: Adjust for the understatement by increasing it by $12,175.
Revenue: ($? + $12,175)
Sales Returns and Allowances: Record the returns on credit sales of $245.
Sales Returns and Allowances: $245
Interest Income: Include the additional $2,367 of interest income.
Interest Income: $2,367
Insurance Expense: Since the prepaid insurance of $325 will be carried over to the next fiscal year, no adjustment is needed.
Lastly, calculate the adjusted balances and the new balances for Accounts Receivable, Inventory, Land Appreciation, and Tesdata, Capital based on the adjustments made.
What are the adjustments needed for Accounts Receivable, Inventory, Land Appreciation, and Tesdata, Capital based on the provided information? The adjustments needed include adding the unrecorded credit sale of $2,100 to Accounts Receivable, recognizing 2% of inventory as unsellable for Inventory, reflecting a 5% land appreciation for Land Appreciation, recording the unrecorded payment to the supplier of $5,200 for Accounts Payable, correcting Cost of Goods Sold to $27,123, adjusting Wages Expense by reducing it by $2,345, increasing Revenue by $12,175, and recording returns on credit sales of $245 for Sales Returns and Allowances. Additionally, including the additional interest income of $2,367 for Interest Income.