On January 1, Year 1, the general ledger of a company includes the following account balances:...
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On January 1, Year 1, the general ledger of a company includes the following account balances: Accounts Debit Credit Cash $ 59,600 Accounts Receivable 26,800 Allowance for Uncollectible Accounts $ 3,100 Inventory 37,200 Notes Receivable (5%, due in 2 years) 22,800 Land 164,000 15,700 Accounts Payable Common Stock 229,000 62,600 Retained Earnings Totals. $310,400 $310,400 During January Year 1, the following transactions occur: January 1 Purchase equipment for $20,400. The company estimates a residual value of $2,400 and a four-year service life. January 4 Pay cash on accounts payable, $10,400. January 8 Purchase additional inventory on account, $91,900. January 15 Receive cash on accounts receivable, $22,900. January 19 Pay cash for salaries, $30,700. January 28 Pay cash for January utilities, $17,400. January 30 Sales for January total $229,000. All of these sales are on account. The cost of the units sold is $119,500. Information for adjusting entries: a. Depreciation on the equipment for the month of January is calculated using the straight-line method. b. The company estimates future uncollectible accounts. The company determines $3,900 of accounts receivable on January 31 are past due, and 50% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 3% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) c. Accrued interest revenue on notes receivable for January. d. Unpaid salaries at the end of January are $33,500. e. Accrued income taxes at the end of January are $9,900. 1. Record each of the transactions listed above. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) Answer is complete and correct. No General Journal Debit Credit Date January 01 Equipment 20,400✔ Cash 20,400✔ January 04 Accounts Payable 10,400 Cash 10,400✔ January 08 Inventory 91,900 91,900✔ January 15 22,900✔ 22,900✔ January 19 30,700✔ 30,700✔ January 28 17,400✔ 17,400✔ January 30 229,000✔ January 30 119,500✔ 1 2 3 4 5 6 7 8 Accounts Payable Accounts Receivable Cash Salaries Expense Cash Utilities Expense Cash Accounts Receivable Sales Revenue Cost of Goods Sold Inventory >> 33 33 >> ✓ ✓ 33 33 ›› 33 > > 229,000 119,500✔ 2. Record the adjusting entries on January 31 for the above transactions. (If no entry is required for a particular transaction/event, select particular "No Journal Entry Required" in the first account field.) Answer is complete and correct. No Date General Journal Debit Credit January 31 Depreciation Expense Accumulated Depreciation 375 January 31 Bad Debt Expense Allowance for Uncollectible Accounts 5,720 January 31 Interest Receivable Interest Revenue January 31 January 31 1 2 3 4 5 Salaries Expense Salaries Payable Income Tax Expense Income Tax Payable 33 >> 33 >> 33 375 5,720 95 33,500 9,900 > > > > 50 95 33,500 9,900 > 3. Prepare an adjusted trial balance as of January 31, Year 1. Answer is complete and correct. Accounts Debit Cash $ 3,600 Accounts Receivable 232,900 Allowance for Uncollectible Accounts Inventory 9,600 Note Receivable 22,800 Interest Receivable 95 Land 164,000 Equipment 20,400 Accumulated Depreciation Accounts Payable Salaries Payable Income Tax Payable Common Stock Retained Earnings Sales Revenue Interest Revenue Cost of Goods Sold Salaries Expense Depreciation Expense Utilities Expense Bad Debt Expense Income Tax Expense Totals Adjusted Trial Balance January 31, Year 1 119,500 64,200 375 17,400 5,720 9,900 $ 670,490 $ 69 Credit 8,820 375 97,200 33,500 9,900 229,000 62,600 229,000 95 $ 670,490 4. Prepare a multiple-step income statement for the period ended January 31, Year 1. Answer is complete and correct. Multiple-Step Income Statement For the month ended January 31, Year 1 Sales Revenue $ 229,000 Cost of Goods Sold 119,500 Gross Profit $ 109,500 Depreciation Expense 375 Salaries Expense 64,200 Utilities Expense 17,400 Bad Debt Expense 5,720 87,695 21,805 95 21,900 9,900 12,000 Expenses Total Operating Expenses Operating Income Income before taxes Interest Revenue Income Tax Expense Net Income $ CA 5. Prepare a classified balance sheet as of January 31, Year 1. (Deductible amounts should be indicated with a minus sign.) Answer is complete and correct. Balance Sheet January 31, Year 1 Assets Liabilities Cash $3,600 Accounts Payable ✓✔$ 97,200 Interest Receivable 95 ✔ Salaries Payable 33,500✔ 9,900✔ Less: Allowance (8,820)✓ Income Tax Payable Accounts Receivable 232,900✔ Inventory 9,600✔ Total Current Assets Stockholder's Equity Land Equipment Notes Receivable Less: Accumulated Depreciation Total Assets 333 33 237,375 ✓164,000 3 3 3 333 20,400 22,800✔ (375) $ 444,200 Total Current Liabilities Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 333 3 140,600 229,000 74,600 303,600 $444,200 Exercise 7-21B Part 6 6. Record closing entries. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) X Answer is not complete. No Date General Journal Debit Credit January 31 Sales Revenue 229,000 Interest Revenue Retained Earnings Cost of Goods Sold Service Revenue Accumulated Depreciation January 31 Retained Earnings Depreciation Expense Utilities Expense Bad Debt Expense Income Tax Expense Salaries Expense Cost of Goods Sold 1 2 ***333 33333 95✓ 74,600 x 3,243 X 234 X 234 x 12,000 375 17,400 5,720 9,900 64,200 119,500 On January 1, Year 1, the general ledger of a company includes the following account balances: Accounts Debit Credit Cash $ 59,600 Accounts Receivable 26,800 Allowance for Uncollectible Accounts $ 3,100 Inventory 37,200 Notes Receivable (5%, due in 2 years) 22,800 Land 164,000 15,700 Accounts Payable Common Stock 229,000 62,600 Retained Earnings Totals. $310,400 $310,400 During January Year 1, the following transactions occur: January 1 Purchase equipment for $20,400. The company estimates a residual value of $2,400 and a four-year service life. January 4 Pay cash on accounts payable, $10,400. January 8 Purchase additional inventory on account, $91,900. January 15 Receive cash on accounts receivable, $22,900. January 19 Pay cash for salaries, $30,700. January 28 Pay cash for January utilities, $17,400. January 30 Sales for January total $229,000. All of these sales are on account. The cost of the units sold is $119,500. Information for adjusting entries: a. Depreciation on the equipment for the month of January is calculated using the straight-line method. b. The company estimates future uncollectible accounts. The company determines $3,900 of accounts receivable on January 31 are past due, and 50% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 3% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) c. Accrued interest revenue on notes receivable for January. d. Unpaid salaries at the end of January are $33,500. e. Accrued income taxes at the end of January are $9,900. 1. Record each of the transactions listed above. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) Answer is complete and correct. No General Journal Debit Credit Date January 01 Equipment 20,400✔ Cash 20,400✔ January 04 Accounts Payable 10,400 Cash 10,400✔ January 08 Inventory 91,900 91,900✔ January 15 22,900✔ 22,900✔ January 19 30,700✔ 30,700✔ January 28 17,400✔ 17,400✔ January 30 229,000✔ January 30 119,500✔ 1 2 3 4 5 6 7 8 Accounts Payable Accounts Receivable Cash Salaries Expense Cash Utilities Expense Cash Accounts Receivable Sales Revenue Cost of Goods Sold Inventory >> 33 33 >> ✓ ✓ 33 33 ›› 33 > > 229,000 119,500✔ 2. Record the adjusting entries on January 31 for the above transactions. (If no entry is required for a particular transaction/event, select particular "No Journal Entry Required" in the first account field.) Answer is complete and correct. No Date General Journal Debit Credit January 31 Depreciation Expense Accumulated Depreciation 375 January 31 Bad Debt Expense Allowance for Uncollectible Accounts 5,720 January 31 Interest Receivable Interest Revenue January 31 January 31 1 2 3 4 5 Salaries Expense Salaries Payable Income Tax Expense Income Tax Payable 33 >> 33 >> 33 375 5,720 95 33,500 9,900 > > > > 50 95 33,500 9,900 > 3. Prepare an adjusted trial balance as of January 31, Year 1. Answer is complete and correct. Accounts Debit Cash $ 3,600 Accounts Receivable 232,900 Allowance for Uncollectible Accounts Inventory 9,600 Note Receivable 22,800 Interest Receivable 95 Land 164,000 Equipment 20,400 Accumulated Depreciation Accounts Payable Salaries Payable Income Tax Payable Common Stock Retained Earnings Sales Revenue Interest Revenue Cost of Goods Sold Salaries Expense Depreciation Expense Utilities Expense Bad Debt Expense Income Tax Expense Totals Adjusted Trial Balance January 31, Year 1 119,500 64,200 375 17,400 5,720 9,900 $ 670,490 $ 69 Credit 8,820 375 97,200 33,500 9,900 229,000 62,600 229,000 95 $ 670,490 4. Prepare a multiple-step income statement for the period ended January 31, Year 1. Answer is complete and correct. Multiple-Step Income Statement For the month ended January 31, Year 1 Sales Revenue $ 229,000 Cost of Goods Sold 119,500 Gross Profit $ 109,500 Depreciation Expense 375 Salaries Expense 64,200 Utilities Expense 17,400 Bad Debt Expense 5,720 87,695 21,805 95 21,900 9,900 12,000 Expenses Total Operating Expenses Operating Income Income before taxes Interest Revenue Income Tax Expense Net Income $ CA 5. Prepare a classified balance sheet as of January 31, Year 1. (Deductible amounts should be indicated with a minus sign.) Answer is complete and correct. Balance Sheet January 31, Year 1 Assets Liabilities Cash $3,600 Accounts Payable ✓✔$ 97,200 Interest Receivable 95 ✔ Salaries Payable 33,500✔ 9,900✔ Less: Allowance (8,820)✓ Income Tax Payable Accounts Receivable 232,900✔ Inventory 9,600✔ Total Current Assets Stockholder's Equity Land Equipment Notes Receivable Less: Accumulated Depreciation Total Assets 333 33 237,375 ✓164,000 3 3 3 333 20,400 22,800✔ (375) $ 444,200 Total Current Liabilities Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 333 3 140,600 229,000 74,600 303,600 $444,200 Exercise 7-21B Part 6 6. Record closing entries. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) X Answer is not complete. No Date General Journal Debit Credit January 31 Sales Revenue 229,000 Interest Revenue Retained Earnings Cost of Goods Sold Service Revenue Accumulated Depreciation January 31 Retained Earnings Depreciation Expense Utilities Expense Bad Debt Expense Income Tax Expense Salaries Expense Cost of Goods Sold 1 2 ***333 33333 95✓ 74,600 x 3,243 X 234 X 234 x 12,000 375 17,400 5,720 9,900 64,200 119,500
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Related Book For
Financial Accounting
ISBN: 978-1259307959
4th edition
Authors: David Spiceland, Wayne Thomas, Don Herrmann
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