Week 4

In Module 01, you prepared a few of the regular monthly entries for Ed. Now, Big Ed's Motorcycle Shop is nearing the fiscal year-end. You have been asked to prepare the adjusting and closing entries to prepare the accounting records for year-end.

use attachedment for Big Ed's trial balance to begin preparing your adjusting and closing entries:

Following is the information you will need to make your adjusting entries:

1. Office equipment has a life of five years with no residual value.
2. Store equipment has a life of five years with no residual value.
3. Shop equipment has a life of ten years with no residual value (assume new equipment was purchased Jan. 1. )
4. A physical inventory of Merchandise Inventory, Parts revealed an actual balance of $97,000.
5. A physical inventory of Merchandise Inventory, Motorcycles revealed that the balance was accurate.
6. Office supplies in the amount of $1,500 were used throughout the year.
7. Salaries should be accrued as follows:
   1. Sales - $3,000
   2. Service - $5,000
   3. Office - $1,500
8. Insurance in the amount of $1,200 was used throughout the year.
9. Interest on the Note Payable is 8% (assume new note was taken out on Jan. 1. )

Once you have completed the adjusting entries, prepare your closing entries.