The Trial Balance and Information for Year-End Adjustments for Litton

question 40

Essay

The trial balance and information for year-end adjustments for Litton Company are as follows:
$\begin{array}{c}\text {Litton Company}\\\text {Trial Balance}\\\text {December 31, 20--}\\\\\begin{array}{lr} \underline{\text { Account Title }}& \underline{\text { Debit }}& \underline{ \text { Credit }}\\\text { Cash } & 19,780 \\\text { Accounts Receivable } & 5,500 \\\text { Supplies } & 1,500 \\\text { Prepaid Insurance } & 2,400 \\\text { Equipment } & 30,200\\\text {Accumulated Depreciation-Equipment}&&5,000\\\text {Accounts Payable}&&5,520\\\text {Wages Payable}\\\text {Litton, Capital}&&44,000\\\text {Litton, Drawing}&4,000\\\text { Service Fees }&&20,000\\ \text { Wages Expense } & 10,000 \\\text { Rent Expense } & 900 \\\text { Supplies Expense } & \\\text { Utilities Expense } & 240\\\text { Insurance Expense}\\\text { Depreciation Expense-Equipment}&\underline{\quad\quad}&\underline{\quad\quad}\\&74,520&74,520\end{array}\end{array}$
a.
Ending inventory of supplies is $800 at December 31,20--.
b.
Unexpired insurance as of year-end is $600.
c.
Depreciation of equipment is $5,000.
d.
Wages earned but not paid as of year-end are $1,700.
Prepare the necessary year-end adjustments on a 10-column work sheet (identify each adjustment by letter),and complete the work sheet.

Grasp the significance of setting transfer prices and the approaches used.

Understand and identify the differences between investment centers and profit centers.

Calculate investment turnover and understand its implications.

Calculate profit margin and understand its relevance in assessing divisional performance.

---

Definitions:

Precision

Precision refers to the accuracy and exactness of an action, measurement, or expression.

Labeling Theory

is a concept in sociology that suggests the labels or definitions applied to individuals by society significantly influence their behavior and identity.

Deviance

Behaviors or actions that violate societal norms or expectations.

Objective Reality

The concept of things existing independently of one's perceptions or beliefs, accessible through empirical observation and not influenced by personal feelings.