Margie Company needs your help to record and summarize its accounting transactions for 2021 and to prepare its financial statements for that year. Margie Company provided you with the following Balance Sheet for 2020. (Note that this balance sheet is not properly classified.) The year-end is December 31.

Assets:
	Cash		$ 57,000
	Accounts Receivable		83,000
	Merchandise Inventory		167,000
	Prepaid Rent - Warehouse		3,500
	Supplies Inventory		3,300
	Prepaid Insurance		6,000
	Land		55,000
	Building	150,000
	Accumulated Depreciation – Bldg	-20,000	130,000
	Equipment	100,000
	Accumulated Depreciation – Equip	-29,000	71,000
	Total Assets:		$ 575,800
Liabilities & Stockholders’ Equity
	Accounts Payable (all for merchandise inventory)		$ 88,000
	Salaries Payable		11,000
	Income Taxes Payable		6,800
	Notes Payable, 7% (due in 6 months)		45,000
	Bonds Payable, 8% (Matures in 2020) (Interest payments due each 12/31)		80,000
	Common Stock –No Par		305,000
	Retained Earnings		40,000
	Total Liabilities & Stockholders’ Equity:		$ 575,800

The following transactions occurred in 2021:

1. Cash sales totaled $140,000.
2. Credit sales totaled $420,000.
3. Credit card sales totaled $280,000. (The credit card company charges Margie Company 4% on sales and transfers the net amount directly to Margie’s bank account.)
4. Purchases of merchandise inventory on account totaled $470,000, terms 2/10,N/30. Margie records all purchases at net and takes advantages of all discounts.
5. The cost of merchandise sold totaled $502,000.
6. Salaries paid to employees totaled $96,000, including the salaries payable at 12/31/20.
7. Utilities paid during the year totaled $59,000
8. Rent for 2017 paid for special equipment totaled $ 60,000.
9. Supplies purchased for cash during the year totaled $12,400.
10. Paid the note payable from last year, plus six months interest.
11. Equipment that had cost $15,000 and had accumulated depreciation of $6,000 was sold for $7,300.
12. Issued an additional 10,000 shares of common stock for a total of $57,000 cash.
13. New equipment costing $24,000 was purchased on August 1. Maggie paid $4,000 down and issued a 1 year, 7.5% note for the balance
14. New equipment costing $ 120,000 was purchased on Nov. 12 for $ 120,000, $ 90,000 was paid in cash and 4,800 shares of common stock was issued for the equipment.
15. Payment to vendors on account for merchandise totaled $483,000.
16. Collections of accounts receivable totaled $ 411,000
17. Declared and paid dividends of $11,800 during the year
18. The income taxes due at the beginning of the year were paid.
19. The insurance policy in effect at the beginning of 2017 expired on 4/1/21.

At that time, a new one-year policy costing $26,000 was purchased.

20. The interest was paid on the bond payable.
21. Paid rent in advance on the warehouse $12,000.

Additional end of year information (for adjusting journal entries):

1. Salaries earned by employees but unpaid as of year-end totaled $7,500.
2. Supplies inventory on hand at year-end totaled $3,950.
3. Depreciation expense on the equipment for the year was determined to be $7,500

4. Depreciation expense on the building for the year was determined to be $ 15,800

5. Prepaid rent as of year-end totaled $5,000.

6. Interest needs to be accrued on the note issued at m, above.

7. Need to record expired insurance.

8. The marginal income tax rate is 30%. The taxes are to be paid in March of 2022. (Need to calculate and accrue tax.)

Required:

1. Prepare the journal entries for the year, based on the transactions thru u data provided.

2. Prepare the year-end adjusting entries based on the additional end-of-year information (1 thru 8).

3. Prepare in proper form for 2021:
   1. Multi-Step Income Statement
   2. Statement of Equity
   3. Classified Balance Sheet

Answer rating: 100% (QA)

a Cash 57000 Accounts Receivable 83000 Merchandise Inventory 167000 Prepaid Rent Warehouse 3500 Supplies Inventory 3300 Prepaid Insurance 6000 Land 55000 Building 150000 Accumulated Depreciation Bldg ... View the full answer