One-Size-Tire Corporation sells a single size of tires. The December 31 Trial balance for One-Size-Tire Corporation...

 

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One-Size-Tire Corporation sells a single size of tires. The December 31 Trial balance for One-Size-Tire Corporation is provided in the excel file called "BUSI-1003 Midterm Winter 2022", and the information is posted in the tab called "Q2". Other information: a) The January 31 2022 bank statement showed that a cash deposit was incorrectly posted as $270 instead of $720. The offsetting entry was Revenues. b) Accounts Receivable aging at December 31 had the following balances: Age 0-30 days 31-60 days 61-90 days Over 90 days Total Collection Probability 99% Date 90% 60% 25% Amount (in$) 20,000 Beginning Inventory April 15 July 22 November 15 Total (Beginning INV and Purchases) 0 c) Merchandise Inventory is based on the following Beginning Inventory and purchases during the year: 1,0000 2,000 23,000 Number of Tires 1,300 500 200 100 2,100 Cost per Tire 20 21 22 23 Total Cost 26,000 10,500 4,400 2,300 43,200 At the end of the year, there were only 300 tires. The difference between the actual ending inventory and the amount in the General Ledger is because the Cost of Sales has not been posted for the year. One-Size-Tire uses the Weighted Average method to calculate inventory. d) The balance of the prepaid expenses was due to the pre-payment of $6,000 in rent for the period of December 1 2021 to May 31 2022. The landlord was not paid until December 31 2021, and the cheque was not cashed by the Landlord until January 5 2022. e) The Equipment was purchased on January 1 2021 and has an estimated life of 6 years with a salvage value of 2,000. Depreciation is based on straight-line. f) The loan was advanced on September 30 2021. The loan must be repaid in full by the end of 2022, but it is likely that it will be repaid on March 15, 2022. The loan has an interest rate of 24% g) Employees were paid $2,800 in wages for the two-week period ending January 4, 2022 (to make things a lot easier: ignore statutory holidays and assume employees worked the same number of hours each and every day during this period) f) The loan was advanced on September 30 2021. The loan must be repaid in full by the end of 2022, but it is likely that it will be repaid on March 15, 2022. The loan has an interest rate of 24% g) Employees were paid $2,800 in wages for the two-week period ending January 4, 2022 (to make things a lot easier: ignore statutory holidays and assume employees worked the same number of hours each and every day during this period). h) $5,000 cash was received in December for work that was intended to be done in December. This was posted as increase in cash and offsetting increase in Revenues. Only $3,000 of this work was completed by December 31. i) In January, it was determined that the Income tax expense for the year ending December 31 2020 was $950. This will not be paid until April the following year. Require a) Post the information to the appropriate YELLOW COLOURED CELLS in the "BUSI-1003 Midterm 2022" file. Please do not add additional columns. b) Prepare a Balance Sheet at Dec 31 2021 and Income Statement for the year ending Dec 31 2021 Midterm Exam Winter 2022 Question 1 Date Normal Balance atDec 31 a b с d e f g h Cash DR 5,000 Accounts Receivable DR 23,000 Allowance for Doubtful Accounts CR 200 Assets Pre-paid expenses DR 6,000 Merchandise Inventory DR 43,200 Equipment DR 25,000 Accumlated Depreciation: Equipment CR Liabilities Accounts Payable + Accruals Deferred Payable CR 16,790 Loan Revenue Payable 10,000 Common Shares CR 28,000 Shareholder Equity (and income statement items) Retained Earnings CR 11,040 Revenues CR 51,170 Cost of Goods Sold DR - All other Expenses DR 12,000 Dividends DR 3,000 One-Size-Tire Corporation sells a single size of tires. The December 31 Trial balance for One-Size-Tire Corporation is provided in the excel file called "BUSI-1003 Midterm Winter 2022", and the information is posted in the tab called "Q2". Other information: a) The January 31 2022 bank statement showed that a cash deposit was incorrectly posted as $270 instead of $720. The offsetting entry was Revenues. b) Accounts Receivable aging at December 31 had the following balances: Age 0-30 days 31-60 days 61-90 days Over 90 days Total Collection Probability 99% Date 90% 60% 25% Amount (in$) 20,000 Beginning Inventory April 15 July 22 November 15 Total (Beginning INV and Purchases) 0 c) Merchandise Inventory is based on the following Beginning Inventory and purchases during the year: 1,0000 2,000 23,000 Number of Tires 1,300 500 200 100 2,100 Cost per Tire 20 21 22 23 Total Cost 26,000 10,500 4,400 2,300 43,200 At the end of the year, there were only 300 tires. The difference between the actual ending inventory and the amount in the General Ledger is because the Cost of Sales has not been posted for the year. One-Size-Tire uses the Weighted Average method to calculate inventory. d) The balance of the prepaid expenses was due to the pre-payment of $6,000 in rent for the period of December 1 2021 to May 31 2022. The landlord was not paid until December 31 2021, and the cheque was not cashed by the Landlord until January 5 2022. e) The Equipment was purchased on January 1 2021 and has an estimated life of 6 years with a salvage value of 2,000. Depreciation is based on straight-line. f) The loan was advanced on September 30 2021. The loan must be repaid in full by the end of 2022, but it is likely that it will be repaid on March 15, 2022. The loan has an interest rate of 24% g) Employees were paid $2,800 in wages for the two-week period ending January 4, 2022 (to make things a lot easier: ignore statutory holidays and assume employees worked the same number of hours each and every day during this period) f) The loan was advanced on September 30 2021. The loan must be repaid in full by the end of 2022, but it is likely that it will be repaid on March 15, 2022. The loan has an interest rate of 24% g) Employees were paid $2,800 in wages for the two-week period ending January 4, 2022 (to make things a lot easier: ignore statutory holidays and assume employees worked the same number of hours each and every day during this period). h) $5,000 cash was received in December for work that was intended to be done in December. This was posted as increase in cash and offsetting increase in Revenues. Only $3,000 of this work was completed by December 31. i) In January, it was determined that the Income tax expense for the year ending December 31 2020 was $950. This will not be paid until April the following year. Require a) Post the information to the appropriate YELLOW COLOURED CELLS in the "BUSI-1003 Midterm 2022" file. Please do not add additional columns. b) Prepare a Balance Sheet at Dec 31 2021 and Income Statement for the year ending Dec 31 2021 Midterm Exam Winter 2022 Question 1 Date Normal Balance atDec 31 a b с d e f g h Cash DR 5,000 Accounts Receivable DR 23,000 Allowance for Doubtful Accounts CR 200 Assets Pre-paid expenses DR 6,000 Merchandise Inventory DR 43,200 Equipment DR 25,000 Accumlated Depreciation: Equipment CR Liabilities Accounts Payable + Accruals Deferred Payable CR 16,790 Loan Revenue Payable 10,000 Common Shares CR 28,000 Shareholder Equity (and income statement items) Retained Earnings CR 11,040 Revenues CR 51,170 Cost of Goods Sold DR - All other Expenses DR 12,000 Dividends DR 3,000

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a Posting the information to the appropriate YELLOW COLOURED CELLS in the BUSI1003 Midterm 2022 file ... View the full answer