ASAP

C D G J K E F H 1 BUDDY CORPORATION 2 Assignment #2 ADJUSTED TRIAL BALANCE 3 Total 35 marks DECEMBER 31, 2019 4 5 6 ACCOUNTS DEBIT 7 CREDIT 8 CASH 9 SHORT TERM FV-NI INVESTMENTS 6,868 10 ACCOUNTS RECEIVABLE 10,300 425,905 11 ALLOWANCE FOR DOUBTFUL ACCOUNTS 12 INVENTORY 3,450 422,812 13 NOTES RECEIVABLE 8,000 14 OFFICE BUILDING 500,000 15 ACCUMULATED DEPRECIATION (OFFICE BUILDING) 16 OFFICE EQUIPMENT 280,000 120,000 17 ACCUMULATED DEPRECIATION (OFFICE EQUIPMENT) 0 18 LAND 52,000 19 ACCOUNTS PAYABLE 298,757 20 DIVIDENDS PAYABLE 7,328 21 NOTES PAYABLE, DUE IN 2022 60,000 22 PREFERRED STOCK, 30,000 OUTSTANDING ON DECEMBER 31, 2019 120,000 23 COMMON STOCK, 100,000 number of shares outstanding ON DEC 31, 2019 200,000 24 RETAINED EARNINGS 269,423 25 SALES REVENUE 3,471,148 26 SALES DISCOUNTS 10,571 27 SALES RETURNS AND ALLOWANCES 51,359 28 PURCHASES 2,600,824 29 PURCHASES DISCOUNTS 46,778 30 TRANSPORTATION IN 25,235 31 SHIPPING EXPENSE 15,000 32 SALARIES EXPENSE 271,599 33 EMPLOYEE PENSION EXPENSE 32,580 34 RENT EXPENSE 40,955 35 INSURANCE EXPENSE 16,456 36 SUPPLIES EXPENSE 25,673 37 GAIN ON SALE OF ASSETS OF DISCONTINUED ACTIVITY 3,650 38 ADVERTISING EXPENSE 18,860 39 WARRANTY EXPENSE 15,000 40 OPERATING LOSS ON DISCONTINUED OPERATIONS 12,225 41 TELEPHONE EXPENSE 28580 25,673 3,650 SUPPLIES EXPENSE GAIN ON SALE OF ASSETS OF DISCONTINUED ACTIVITY ADVERTISING EXPENSE WARRANTY EXPENSE OPERATING LOSS ON DISCONTINUED OPERATIONS TELEPHONE EXPENSE CASH DIVIDENDS DECLARED - PREFERRED CASH DIVIDENDS DECLARED - COMMON TOTAL 18,860 15,000 12,225 28,580 37,568 12,164 4,760,534 4,760,534 NOTE: All revenue, expense figures (Income Statement accounts) and the Error correction (Retained Earnings account) above are before tax. Assume this company is following ASPE ADDITIONAL INFORMATION: 1. Assume that the tax rate was 30%. All accounts on the Trial Balance are before tax. 5 32. In 2019 common stock was issued as follows: 7 on April 1: 20,000 common shares were issued 3 and on September 1: 30,000 common shares were issued. 9 The amount of common stock outstanding at the end of the year (Dec 31, 2019) is 100,000 0 1 3. It was discovered that an error occurred in 2017 relating to Depreciation Expense. 2 The Depreciation Expense was understated in 2017 by $11,200 before taxes. 3 4 NOTE: This entry has not been reflected in the above Trial Balance. An adjustment is needed. 55 56 4. The company performed a year end physical count of its inventory as at December 31, 2019. 57 The amount of inventory on hand at December 31, 2019 amourted to $425,700. 58 Inventory is maintained on a PERIODIC basis. Therefore the Inventory balance on Trial Balance is the opening balar 39 70 NOTE: This entry has not been reflected in the above Trial Balance. An adjustment is needed 71 3. It was discovered that an error occurred in 2017 relating to Depreciation Expense. The Depreciation Expense was understated in 2017 by $11,200 before taxes. NOTE: This entry has not been reflected in the above Trial Balance. An adjustment is needed. 4. The company performed a year end physical count of its inventory as at December 31, 2019. The amount of inventory on hand at December 31, 2019 amounted to $425,700. Inventory is maintained on a PERIODIC basis. Therefore the Inventory balance on Trial Balance is the opening balance. NOTE: This entry has not been reflected in the above Trial Balance. An adjustment is needed. 1 2 3 Assignment #2 on Chapter 4 (worth 5%) Due Monday November 1 4 (May be prepared on your own or with one other student) 5 6 REQUIRED: -7 1. Prepare a detailed multi-step income statement (including detailed EPS presentation) 8 and a Statement of Retained Earnings for December 31, 2019. (30 marks) 79 Show calculations for EPS. 30 Show details of COST OF GOODS SOLD and OPERATING EXPENSES sections when preparing Income Statement 31 32 2. Prepare the required journal entry to adjust the 2017 Depreciation error. (2 marks) B3 34 3. Prepare the COGS year end adjusting entry to update COGS and Inventory (3 marks) 85 86 87 88 C D G J K E F H 1 BUDDY CORPORATION 2 Assignment #2 ADJUSTED TRIAL BALANCE 3 Total 35 marks DECEMBER 31, 2019 4 5 6 ACCOUNTS DEBIT 7 CREDIT 8 CASH 9 SHORT TERM FV-NI INVESTMENTS 6,868 10 ACCOUNTS RECEIVABLE 10,300 425,905 11 ALLOWANCE FOR DOUBTFUL ACCOUNTS 12 INVENTORY 3,450 422,812 13 NOTES RECEIVABLE 8,000 14 OFFICE BUILDING 500,000 15 ACCUMULATED DEPRECIATION (OFFICE BUILDING) 16 OFFICE EQUIPMENT 280,000 120,000 17 ACCUMULATED DEPRECIATION (OFFICE EQUIPMENT) 0 18 LAND 52,000 19 ACCOUNTS PAYABLE 298,757 20 DIVIDENDS PAYABLE 7,328 21 NOTES PAYABLE, DUE IN 2022 60,000 22 PREFERRED STOCK, 30,000 OUTSTANDING ON DECEMBER 31, 2019 120,000 23 COMMON STOCK, 100,000 number of shares outstanding ON DEC 31, 2019 200,000 24 RETAINED EARNINGS 269,423 25 SALES REVENUE 3,471,148 26 SALES DISCOUNTS 10,571 27 SALES RETURNS AND ALLOWANCES 51,359 28 PURCHASES 2,600,824 29 PURCHASES DISCOUNTS 46,778 30 TRANSPORTATION IN 25,235 31 SHIPPING EXPENSE 15,000 32 SALARIES EXPENSE 271,599 33 EMPLOYEE PENSION EXPENSE 32,580 34 RENT EXPENSE 40,955 35 INSURANCE EXPENSE 16,456 36 SUPPLIES EXPENSE 25,673 37 GAIN ON SALE OF ASSETS OF DISCONTINUED ACTIVITY 3,650 38 ADVERTISING EXPENSE 18,860 39 WARRANTY EXPENSE 15,000 40 OPERATING LOSS ON DISCONTINUED OPERATIONS 12,225 41 TELEPHONE EXPENSE 28580 25,673 3,650 SUPPLIES EXPENSE GAIN ON SALE OF ASSETS OF DISCONTINUED ACTIVITY ADVERTISING EXPENSE WARRANTY EXPENSE OPERATING LOSS ON DISCONTINUED OPERATIONS TELEPHONE EXPENSE CASH DIVIDENDS DECLARED - PREFERRED CASH DIVIDENDS DECLARED - COMMON TOTAL 18,860 15,000 12,225 28,580 37,568 12,164 4,760,534 4,760,534 NOTE: All revenue, expense figures (Income Statement accounts) and the Error correction (Retained Earnings account) above are before tax. Assume this company is following ASPE ADDITIONAL INFORMATION: 1. Assume that the tax rate was 30%. All accounts on the Trial Balance are before tax. 5 32. In 2019 common stock was issued as follows: 7 on April 1: 20,000 common shares were issued 3 and on September 1: 30,000 common shares were issued. 9 The amount of common stock outstanding at the end of the year (Dec 31, 2019) is 100,000 0 1 3. It was discovered that an error occurred in 2017 relating to Depreciation Expense. 2 The Depreciation Expense was understated in 2017 by $11,200 before taxes. 3 4 NOTE: This entry has not been reflected in the above Trial Balance. An adjustment is needed. 55 56 4. The company performed a year end physical count of its inventory as at December 31, 2019. 57 The amount of inventory on hand at December 31, 2019 amourted to $425,700. 58 Inventory is maintained on a PERIODIC basis. Therefore the Inventory balance on Trial Balance is the opening balar 39 70 NOTE: This entry has not been reflected in the above Trial Balance. An adjustment is needed 71 3. It was discovered that an error occurred in 2017 relating to Depreciation Expense. The Depreciation Expense was understated in 2017 by $11,200 before taxes. NOTE: This entry has not been reflected in the above Trial Balance. An adjustment is needed. 4. The company performed a year end physical count of its inventory as at December 31, 2019. The amount of inventory on hand at December 31, 2019 amounted to $425,700. Inventory is maintained on a PERIODIC basis. Therefore the Inventory balance on Trial Balance is the opening balance. NOTE: This entry has not been reflected in the above Trial Balance. An adjustment is needed. 1 2 3 Assignment #2 on Chapter 4 (worth 5%) Due Monday November 1 4 (May be prepared on your own or with one other student) 5 6 REQUIRED: -7 1. Prepare a detailed multi-step income statement (including detailed EPS presentation) 8 and a Statement of Retained Earnings for December 31, 2019. (30 marks) 79 Show calculations for EPS. 30 Show details of COST OF GOODS SOLD and OPERATING EXPENSES sections when preparing Income Statement 31 32 2. Prepare the required journal entry to adjust the 2017 Depreciation error. (2 marks) B3 34 3. Prepare the COGS year end adjusting entry to update COGS and Inventory (3 marks) 85 86 87 88