The following information for Drake Company which

adjusts and closes #2405

The following information for Drake Company, which adjusts and closes its accounts every
December 31, is available for 2016:1. Salaries accrued but unpaid total $2,840 on December
31, 2016.2. The $247 December utility bill arrived on December 31 and has not been paid or
recorded.3. Buildings with a cost of $78,000, 25-year life, and $9,000 residual value are to be
depreciated; equipment with a cost of $44,000, 8-year life, and $2,000 residual value is also to
be depreciated. The straight-line method is to be used.4. A count of supplies indicates that the
Store Supplies account should be reduced by $128 and the Office Supplies account reduced by
$397 for supplies used during the year.5. The company holds a $6,000, 12% (annual rate),
6-month note receivable dated September 30, 2016, from a customer. The interest is to be
collected on the maturity date.6. Bad debts expense is estimated to be 1% of annual sales.
Sales for 2016 total $65,000.7. An analysis of the company insurance policies indicates that the
Prepaid Insurance account is to be reduced for $528 of expired insurance.8. A review of travel
expense reports indicates that $310 has been paid for airfare for a salesperson (and recorded
as Travel Expenses), but has not yet been used.9. The income tax rate is 30% on current
income and will be paid in the first quarter of 2017. The pretax income of the company before
adjustments is $18,270.Required:Journalize the necessary adjusting entries for Drake at the
end of 2016. Show supporting calculations in your journal entry explanations.View Solution:
The following information for Drake Company which adjusts and closes

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