Underwater Adventures Has the Following Account Balances on August 31

Essay

Underwater Adventures has the following account balances on August 31, 2019: $$\begin{array} { l r } \text { Accounts payable } & \$ 8,800 \\\text { Accounts receivable } & 9,600 \\\text { Accumulated amortization - equipment } & 30,300 \\\text { Cash } & 2,200 \\\text { Cost of goods sold } & 341,500 \\\text { Jacobson, capital } & 190,700 \\\text { Jacobson, withdrawals } & 44,000 \\\text { Equipment } & 88,000 \\\text { Interest earned } & 2,000 \\\text { Inventory } & 71,500 \\\text { Operating expenses } & 175,500 \\\text { Sales discounts } & 3,100 \\\text { Sales retarns and allowances } & 14,400 \\\text { Sales revenue } & 520,600 \\\text { Supplies } & 7,100 \\\text { Unearned sales revenue } & 4,500\end{array}$$ The following information as at August 31, 2019 was also available:
a. A physical count of items showed $1,200 of supplies on hand.
b. An inventory count showed inventory on hand of $66,400.
c. The equipment has an estimated useful life of eight years and is expected to have no salvage value.
d. Unearned sales revenue of $1,000 was earned.
Required:
1. Prepare the necessary adjusting journal entries at August 31, 2019. For simplicity all operating expenses are combined into a single operating expense account for financial statement purposes. Use the normal account name for the adjusting journal entries.
2. Prepare a classified balance sheet based on adjusted account balances.