Quigley Corporation’s trial balance at December 31, 2020, is presented below. All 2020 transactions have been recorded except for the items described below.

Unrecorded transactions and adjustments:

1. On January 1, 2020, Quigley issued 1,000 shares of $20 par, 6% preferred stock for $22,000.

2. On January 1, 2020, Quigley also issued 1,000 shares of common stock for $23,000.

3. Quigley reacquired 300 shares of its common stock on July 1, 2020, for $49 per share.

4. On December 31, 2020, Quigley declared the annual cash dividend on the preferred stock and a $1.50 per share dividend on the outstanding common stock, all payable on January 15, 2021.

5. Quigley estimates that uncollectible accounts receivable at year-end is $5,100.

6. The building is being depreciated using the straight-line method over 30 years. The salvage value is $5,000.

7. The equipment is being depreciated using the straight-line method over 10 years. The salvage value is $4,000.

8. The unearned rent was collected on October 1, 2020. It was the receipt of 4 months’ rent in advance (October 1, 2020 through January 31, 2021).

9. The 10% bonds payable pay interest every January 1. The interest for the 12 months ended December 31, 2020, has not been paid or recorded.

Instructions

(Ignore income taxes.)

a. Prepare journal entries for the transactions and adjustment listed above.

b. Prepare an updated December 31, 2020, trial balance, reflecting the journal entries in (a).

c. Prepare a multiple-step income statement for the year ending December 31, 2020.

d. Prepare a retained earnings statement for the year ending December 31, 2020.

e. Prepare a classified balance sheet as of December 31, 2020.

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Debit Credit Cash $ 25,500 Accounts Receivable 51,000 22,700 65,000 95,000 40,000 Inventory Land Buildings Equipment Allowance for Doubtful Accounts $ 450 Accumulated Depreciation-Buildings Accumulated Depreciation-Equipment Accounts Payable Interest Payable Dividends Payable 30,000 14,400 19,300 -0- Unearned Rent Revenue 8,000 Bonds Payable (10%) Common Stock ($10 par) Paid-in Capital in Excess of Par-Common Stock Preferred Stock ($20 par) Paid-in Capital in Excess of Par-Preferred Stock Retained Earnings Treasury Stock 50,000 30,000 6,000 -0- -0- 75,050 -0- Cash Dividends -0- Sales Revenue 570,000 Rent Revenue -0- Bad Debt Expense Interest Expense -0- -0- Cost of Goods Sold 400,000 Depreciation Expense Other Operating Expenses Salaries and Wages Expense -0- 39,000 65,000 Total $803,200 $803,200