Please answer all the questions. The following information is given at the begin
ID: 2561796 • Letter: P
Question
Please answer all the questions.
The following information is given at the beginning of December.
Debit Credit
Cash $67,500
Accounts receivables $21,000
Allowance for uncollectible accounts $7,000
Inventory (1,100 units at $7) $7,700
Accounts payable $25,400
Common stock $43,000
Retained earnings $20,800
Total $96,200 $96,200
Prepare journal entries to record the December transactions and the T- Account
Dec1 Lend $14,000 to an employee by receiving a note for six months at annual interest rate of 12% due at the maturity date.
Dec 6 Purchase 3,800 units of inventory on account at $10 per unit for a total cost of $38,000.
Dec 12 Assuming the perpetual method is used, the company sold 3,200 units at $20 each on account, terms 2/10, n/30. Calculate the cost of goods sold using the FIFO method and record the appropriate journal entries for the sale and the cost of the sale. (Hint: Make sure to consider the beginning inventory balance from the beginning trial balance)
Dec 20 Paid $28,000 to suppliers for purchases made on account in the prior month.
Dec 23 Received cash of $16,000 for sales of inventory made on account on December 12.
Dec28 Write-off $2,800 of accounts receivables using the allowance method.
Dec 30 Paid $4,400 for income tax for the month of December.
Record the following four transactions as adjusting and prepare the t-account
Dec 31 The company estimates 20% of the ending balance of accounts receivables is not going to be collected. (Hint: Remember to consider the balance in the allowance for uncollectibe account, if any.)
Dec 31 Record December's adjustment to accrue interest for the notes receivables.
Dec 31 The company uses the lower of cost or net realizable value method for inventory valuation. The net realizable value of the inventory is $8 per unit. Make the adjusting entry if necessary.
Dec 31 Calculate depreciation using Straight line method. The equipment purchased has a useful life of 72 months and no residual value. Record the depreciation for the month of December.
Prepare the unadjusted trial balance under the “Unadjusted Trial Balance Provide the total of the debit column from the Unadjusted trial balance Provide the following accounts balances from the Adjusted Trial Balance: (Please enter all amounts as a postive number. No brackets.)
Cash ( )
Accounts receivable ( )
Allowance for uncollectible accounts( )
Inventory ( )
Notes receivable( )
Interest receivables( )
Equipment ( )
Accumulated depreciation ( )
Accounts payable ( )
Common stock ( )
Retained earnings ( )
Sales revenue ( )
Interest revenue ( )
Cost of goods sold ( )
Bad debt expense ( )
Depreciation expense ( )
Income tax expense ( )
Prepare the Multi-step Income Statement, Statement of Stockholder’s Equity, and Classified Balance Sheet under the “Financial Statements” tab for the month ended December 31, 20XX
Check point: Total assets $117,500
Explanation / Answer
Triaal Balance
Workings:
Income statement for the year ending December 31 Sales revenue 64000 cost f goods sold 32100 Gross margin 31900 Bad Debt expense 6800 Operating income 25100 Non operating items Interest revenue 140 Net income before tax 25240 Incometeax expense 4400 Net Income 20840 Statement of stockholders' equity for the year ending December 31 Common stock 43000 Retained Earnings Balance as at December 1 20800 Net income for December 20840 Balance as at December 31 41640 Stockholders' equity as at December 31 84640 Balance Sheet as at December 31 Assets Cash 37100 Accounts receivable 69000 Less: allowance for doubtful accounts -13800 55200 Inventory 13600 Note Receivable 14000 Interest Receivable 140 Total Assets 120040 Liabilities and equity Accounts payable 35400 Stockholders' equity Common Stock 43000 Reteined earnings 41640 Total liabilities and equity 120040