Blue Spruce Companys trial balance at December 31, 2019, is presented below. All 2019 transactions have been
Question:
Blue Spruce Company’s trial balance at December 31, 2019, is presented below. All 2019 transactions have been recorded except for the items described following the trial balance.
Debit | Credit | ||
Cash | $26,000 | ||
Accounts Receivable | 36,500 | ||
Notes Receivable | 8,900 | ||
Interest Receivable | –0– | ||
Inventory | 36,200 | ||
Prepaid Insurance | 3,780 | ||
Land | 21,800 | ||
Buildings | 132,000 | ||
Equipment | 55,000 | ||
Patents | 10,300 | ||
Allowance for Doubtful Accounts | $400 | ||
Accumulated Depreciation—Buildings | 44,000 | ||
Accumulated Depreciation—Equipment | 22,000 | ||
Accounts Payable | 27,100 | ||
Salaries and Wages Payable | –0– | ||
Unearned Rent Revenue | 3,300 | ||
Notes Payable (due in 2020) | 13,000 | ||
Interest Payable | –0– | ||
Notes Payable (due after 2020) | 36,000 | ||
Common Stock | 46,500 | ||
Retained Earnings | 57,580 | ||
Dividends | 15,000 | ||
Sales Revenue | 903,000 | ||
Interest Revenue | –0– | ||
Rent Revenue | –0– | ||
Gain on Disposal of Plant Assets | –0– | ||
Bad Debts Expense | –0– | ||
Cost of Goods Sold | 640,000 | ||
Depreciation Expense | –0– | ||
Insurance Expense | –0– | ||
Interest Expense | –0– | ||
Other Operating Expenses | 61,400 | ||
Amortization Expense | –0– | ||
Salaries and Wages Expense | 106,000 | ||
Total | $1,152,880 | $1,152,880 |
Unrecorded transactions:
1. | On May 1, 2019, Blue Spruce purchased equipment for $17,800 plus sales taxes of $1,400 (all paid in cash). | |
2. | On July 1, 2019, Blue Spruce sold for $3,600 equipment which originally cost $5,100. Accumulated depreciation on this equipment at January 1, 2019, was $2,000; 2019 depreciation prior to the sale of the equipment was $450. | |
3. | On December 31, 2019, Blue Spruce sold on account $5,400 of inventory that cost $3,200. | |
4. | Blue Spruce estimates that uncollectible accounts receivable at year-end is $4,000. | |
5. | The note receivable is a one-year, 8% note dated April 1, 2019. No interest has been recorded. | |
6. | The balance in prepaid insurance represents payment of a $3,780 6-month premium on September 1, 2019. | |
7. | The buildings are being depreciated using the straight-line method over 30 years. The salvage value is $30,000. | |
8. | The equipment owned prior to this year is being depreciated using the straight-line method over 5 years. The salvage value is 10% of cost. | |
9. | The equipment purchased on May 1, 2019, is being depreciated using the straight-line method over 5 years, with a salvage value of $2,100. | |
10. | The patent was acquired on January 1, 2019, and has a useful life of 10 years from that date. | |
11. | Unpaid salaries and wages at December 31, 2019, total $2,200. | |
12. | The unearned rent revenue of $3,300 was received on December 1, 2019, for 3 months’ rent. | |
13. | Both the short-term and long-term notes payable are dated January 1, 2019, and carry a 9% interest rate. All interest is payable in the next 12 months. | |
Prepare journal entries for the transactions listed above.
Accounting Principles
ISBN: 978-1119411482
13th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso