JKL Enterprise reported the following trial balance for year ending December 31,2017 Cash 45,000 Accounts receivable...

JKL Enterprise reported the following trial balance for year ending December 31,2017

Cash	45,000
Accounts receivable	15,000
Inventory	20,000
Note receivable	60,000
Interest receivable
Plant, property and equipment	1,125,000
Accumulate depreciation		800,000
Land	700,000
Note payable		180,000
Interest payable		15,000
Common stock		2,000
Retained earning		878,000
Sales revenue		1,200,000
Cost of goods sold	960,000
Salaries	120,000
Insurance	30,000

Notes indicate that:

Bookkeeper was instructed to charge all checks written to the appropriate expense. Accountants will do all adjusting, accruals and deferrals.

Of the note receivable, 30,000 was a 10 year all interest payable at end of ten years loan to the vice-president of the company. Interest 2%. Loan was made on January 2, 2017

The balance of the note receivable was to a customer to upgrade their facility so they could use more of what JKL produced. Loan was July 1, 2017, 6%with $10,000 and all accrued interest to be paid June 20,2018,June 30 2019,June 30 2020.

Depreciation for 2017 was 25,000.

Insurance was for a three year policy beginning July 1 2017.

Salaries included a 20,000 salary advance to an executive, to be repaid by withholding 500 from his weekly salary until repaid. No interest payable.

Prepare adjusting balance sheet and income statement.

Expert Solution

	Adjusting entries
1	Interest receivable	600	(30000*2%)
	Interest revenue		600
2	Interest receivable	300	(100006%6/12)
	Interest revenue		300
3	Depreciation expense	25000
	Accumulated depreciation		25000
4	Insurance expense	5000	(30000*6/36)
	Insurance		5000
5	Advance salaries	20000
	Salaries		20000

	Income statement
	Sales revenue	1200000
	Interest revenue	900
	Total revenue		1200900
Less	Expense
	Cost of goods sold	960000
	Salaries	100000
	Insurance expense	5000
	Depreciation expense	25000
	Total expense		1090000
	Net income		110900

	Balance sheet
	Assets
	Current asset
	Cash	45000
	Accounts receivable	15000
	Interest receivable	900
	Advance salaries	20000
	Insurance	25000
	Inventory	20000
	Total current assets		125900
	Notes receivable	60000
	Plant property and equipment	1125000
	Accumulated depreciation	-825000
	Land	700000	1060000
	Total assets		1185900
	Liabilities and stockholders equity
	Liabilities
	Notes payable	180000
	Interest payable	15000
	Total liabilities		195000
	Stockholders equity
	Common stock	2000
	Retained earnings 878000+110900	988900
	Total stockholders equity		990900
	Total liabilities and stockholders equity		1185900

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