Sapphire Gems and Minerals Co Ltd - Turquoise Division Trial Balance as of December 31, 2022...
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Sapphire Gems and Minerals Co Ltd - Turquoise Division Trial Balance as of December 31, 2022 A/C Name Trial Balance DR CR Cash 3,800,000 Accounts receivable 3,800,000 Allowance for bad debt 350,000 Other debtors Merchandise Inventory 8,000,000 Store Supplies 1,200,000 Prepaid Insurance 5,525,000 Prepaid rent 2,240,000 Furniture & Equipment 8,600,000 Accumulated deprecation-Furniture and equipment 3,400,000 Motor Truck 2,400,000 Accumulated depreciation- Motor Truck 1,770,854 Accounts payable 450,000 Salary payable Interest payable Unearned Sales revenue Note Payable, long term Capital Withdrawals Sales revenue Sales discount Sales returns and allowances Cost of goods sold Salaries expense Insurance Expense Utilities Expense Rent Expense Depreciation Expense - Furniture and Equipment Depreciation Expense - Motor truck Store Supplies Expense Gain/loss on Disposal of Fixed Asset Bad-Debt Expense Interest Expense 600,000 2,800,000 17,000,000 56,570 29,991,716 400,500 400,500 9,500,000 7,500,000 700,000 2,240,000 56,362,570 56,362,570 The following additional information is available December 31, 2022: 1) Store Supplies on hand on December 31, 2022, amounted to $500,000. 2) Insurance of $5,525,000 was paid on January 1, 2022, for the 17-months to May 31, 2023 3) Prepaid rent expired December 31, 2022, amounted to $1,600,000. 4) The furniture and equipment have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $100,000. 5) The motor truck cost relates to two Livi Trucks purchased for $1,200,000 each by the company on January 1, 2016. The double-declining balance method of depreciation is used to compute the truck's depreciation charges and their expected useful life is 10 years or 100,000 miles. In 2016, 15,000 miles were driven, 18,500 in 2017, 15,600 in 2018, 17,000 in 2019, 14,500 in 2020, 10,800 in 2021 and 12,800 in 2022. The residual value on both truck is $209,715 each. On July 1, 2022, the company sold one of the trucks to Daley Company for $450,000 on credit. Round off answers to the nearest dollar. 6) Salaries earned by employees and not yet paid amounted to $200,000 on Dec 31, 2022. 7) Accrued interest expense as of December 31, 2022, $80,000. 8) On Dec 31, 2022, $490,000 of the previously unearned sales revenue had been earned. 9) The aging of the Accounts Receivable schedule on Dec 31, 2022, indicated that the Allowance for Bad Debts should be $380,000. 10) A physical count of inventory was done on December 31, 2022, after making all the other adjustments and this revealed that there was $8,400,000 worth of inventory on hand at this point. Other data: 11) The business is expected to make principal payments totalling $200,000 towards the loan during the fiscal year to November 30,2023 Required: a) Prepare the necessary adjusting journal entries on Dec 31, 2022. [Narrations are not required] b) Prepare the Adjusted Trial balance for the period ending December 31, 2022. c) Prepare the following financial statements for the division: A Multiple-step income statement & a Statement of owner's equity for the year December 31, 2022 A Classified balance sheet, in report format, at December 31, 2022. ended Sapphire Gems and Minerals Co Ltd - Turquoise Division Trial Balance as of December 31, 2022 A/C Name Trial Balance DR CR Cash 3,800,000 Accounts receivable 3,800,000 Allowance for bad debt 350,000 Other debtors Merchandise Inventory 8,000,000 Store Supplies 1,200,000 Prepaid Insurance 5,525,000 Prepaid rent 2,240,000 Furniture & Equipment 8,600,000 Accumulated deprecation-Furniture and equipment 3,400,000 Motor Truck 2,400,000 Accumulated depreciation- Motor Truck 1,770,854 Accounts payable 450,000 Salary payable Interest payable Unearned Sales revenue Note Payable, long term Capital Withdrawals Sales revenue Sales discount Sales returns and allowances Cost of goods sold Salaries expense Insurance Expense Utilities Expense Rent Expense Depreciation Expense - Furniture and Equipment Depreciation Expense - Motor truck Store Supplies Expense Gain/loss on Disposal of Fixed Asset Bad-Debt Expense Interest Expense 600,000 2,800,000 17,000,000 56,570 29,991,716 400,500 400,500 9,500,000 7,500,000 700,000 2,240,000 56,362,570 56,362,570 The following additional information is available December 31, 2022: 1) Store Supplies on hand on December 31, 2022, amounted to $500,000. 2) Insurance of $5,525,000 was paid on January 1, 2022, for the 17-months to May 31, 2023 3) Prepaid rent expired December 31, 2022, amounted to $1,600,000. 4) The furniture and equipment have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $100,000. 5) The motor truck cost relates to two Livi Trucks purchased for $1,200,000 each by the company on January 1, 2016. The double-declining balance method of depreciation is used to compute the truck's depreciation charges and their expected useful life is 10 years or 100,000 miles. In 2016, 15,000 miles were driven, 18,500 in 2017, 15,600 in 2018, 17,000 in 2019, 14,500 in 2020, 10,800 in 2021 and 12,800 in 2022. The residual value on both truck is $209,715 each. On July 1, 2022, the company sold one of the trucks to Daley Company for $450,000 on credit. Round off answers to the nearest dollar. 6) Salaries earned by employees and not yet paid amounted to $200,000 on Dec 31, 2022. 7) Accrued interest expense as of December 31, 2022, $80,000. 8) On Dec 31, 2022, $490,000 of the previously unearned sales revenue had been earned. 9) The aging of the Accounts Receivable schedule on Dec 31, 2022, indicated that the Allowance for Bad Debts should be $380,000. 10) A physical count of inventory was done on December 31, 2022, after making all the other adjustments and this revealed that there was $8,400,000 worth of inventory on hand at this point. Other data: 11) The business is expected to make principal payments totalling $200,000 towards the loan during the fiscal year to November 30,2023 Required: a) Prepare the necessary adjusting journal entries on Dec 31, 2022. [Narrations are not required] b) Prepare the Adjusted Trial balance for the period ending December 31, 2022. c) Prepare the following financial statements for the division: A Multiple-step income statement & a Statement of owner's equity for the year December 31, 2022 A Classified balance sheet, in report format, at December 31, 2022. ended
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Related Book For
Financial Reporting And Analysis
ISBN: 9781260247848
8th Edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
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