Acc421 Intermediate Accounting I: Problem 2 - The following is the trial balance of the ANJ Company

Acc421 Intermediate Accounting I
Week 2 Learning Team Assignment

Problem 2
The following is the trial balance of the ANJ Company as of December 31:
ANJ Company
Trial Balance
December 31
Debit Credit
Cash 168,100
Accounts Receivable 381,500
Allowance for Doubtful Accounts 6,400
Inventory, December 31 726,700
Prepaid Insurance 46,300
Equipment 763,100
Accumulated Depreciation - Equipment 317,900
Notes Payable 254,400
Common Stock 732,200
Retained Earnings 90,800
Sales 5,450,400
Cost of Goods Sold 3,615,400
Sales Salaries Expense 454,200
Advertising Expense 60,900
Administrative Salaries Expense 590,500
Office Expense 45,400
6,852,100 6,852,100

Additional Information:
1. Estimated bad debt expense for the year is $12,720.
2. Equipment is depreciated using the straight-line method over the estimated life of 11 years with zero estimated salvage value.
3. During the year, $23,150 of the prepaid insurance expired.
4. During the year, $30,530 of interest on the notes payable accrued.
5. $21,800 of sales salaries were earned towards the end of the year but not recorded.
6. The company paid $6,360 for advertising in advance with will be used during the next year.
7. At the end of the year, $13,620 of office supplies was on hand. All purchases of office supplies are charged to Office Expense when purchased.
8. The company ends its accounting year on December 31.

1. Prepare the annual adjusting journal entries necessary as of December 31.
2. Prepare the annual closing journal entries necessary to close the books for the year.
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