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Pastina Company sells various types of pasta to grocery chains as private label brands. The company's reporting year-end is December 31.

Pastina Company sells various types of pasta to grocery chains as private label brands. The company's reporting year-end is December 31. The unadjusted trial balance as of December 31, 2021, appears below.

   

Account Title Debits   Credits  
Cash 35,500      
Accounts receivable 43,000      
Supplies 3,000      
Inventory 63,000      
Notes receivable 23,000      
Interest receivable 0      
Prepaid rent 2,500      
Prepaid insurance 9,000      
Office equipment 92,000      
Accumulated depreciation     34,500  
Accounts payable     34,000  
Salaries payable     0  
Notes payable     53,000  
Interest payable     0  
Deferred sales revenue     3,500  
Common stock     81,000  
Retained earnings     36,000  
Dividends 7,000      
Sales revenue     161,000  
Interest revenue     0  
Cost of goods sold 85,000      
Salaries expense 20,400      
Rent expense 12,500      
Depreciation expense 0      
Interest expense 0      
Supplies expense 2,600      
Insurance expense 0      
Advertising expense 4,500      
Totals 403,000   403,000  
 

Information necessary to prepare the year-end adjusting entries appears below.

  1. Depreciation on the office equipment for the year is $11,500.
  2. Employee salaries are paid twice a month, on the 22nd for salaries earned from the 1st through the 15th, and on the 7th of the following month for salaries earned from the 16th through the end of the month. Salaries earned from December 16 through December 31, 2021, were $1,550.
  3. On October 1, 2021, Pastina borrowed $53,000 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years.
  4. On March 1, 2021, the company lent a supplier $23,000 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2022.
  5. On April 1, 2021, the company paid an insurance company $9,000 for a one-year fire insurance policy. The entire $9,000 was debited to prepaid insurance.
  6. $920 of supplies remained on hand at December 31, 2021.
  7. A customer paid Pastina $3,500 in December for 1,500 pounds of spaghetti to be delivered in January 2022. Pastina credited deferred sales revenue.
  8. On December 1, 2021, $2,500 rent was paid to the owner of the building. The payment represented rent for December 2021 and January 2022 at $1,250 per month. The entire amount was debited to prepaid rent.

3. Prepare an adjusted trial balance. (Do not round intermediate calculations. Round your final answers to nearest whole dollar.)

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