Account balances taken from the ledger of Builders Supply Corporation on December 31, 2011, before adjustment, follow

Question:

Account balances taken from the ledger of Builders’ Supply Corporation on December 31, 2011, before adjustment, follow information relating to adjustments on December 31, 2011:

(a) Allowance for Bad Debts is to be increased to a balance of $3,000.

(b) Buildings are depreciated at the rate of 5% per year.

(c) Accrued selling expenses are $3,840.

(d) There are supplies of $780 on hand.

(e) Prepaid insurance relating to 2012 totals $720.

(f) Accrued interest on long-term investments is $240.

(g) Accrued real estate and payroll taxes are $900.

(h) Accrued interest on the mortgage is $480.

(i) Income taxes are estimated to be 20% of the income before income taxes.

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 24,000

Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,000

Allowance for Bad Debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,380

Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,570

Long-Term Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,400

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69,600

Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,000

Accumulated Depreciation—Buildings . . . . . . . . . . . . . . . . . . . . . . . . 19,800

Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,000

Mortgage Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68,800

Capital Stock, $10 par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180,000

Retained Earnings, December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . 14,840

Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,400

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246,000

Sales Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,360

Sales Discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,400

Cost of Goods Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114,370

Selling Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,440

Office Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,680

Insurance Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,440

Supplies Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,200

Taxes—Real Estate and Payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,980

Interest Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 660

Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,640


Instructions:

1. Prepare a trial balance.

2. Journalize the adjustments.

3. Journalize the closing entries.

4. Prepare a post-closing trial balance.


Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Intermediate Accounting

ISBN: 978-0324592375

17th Edition

Authors: James D. Stice, Earl K. Stice, Fred Skousen

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