Raymond Company’s trial balance at December 31, 2014,

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Raymond Company’s trial balance at December 31, 2014, is presented below. All 2014 transactions have been recorded except for the items described shown below. 

 
Debit
Credit
Cash
$28,000
 
Accounts receivable
36,000
 
Notes receivable
10,000
 
Interest receivable
0
 
Inventory
36,200
 
Prepaid insurance
4,400
 
Land
20,000
 
Buildings
160,000
 
Equipment
60,000
 
Patents
8,000
 
Allowances for doubtful accounts
 
300
Accumulated depreciation-Buildings
 
49,000
Accumulated depreciation-Equipment
 
24,000
Accounts payable
 
28,300
Income taxes payable
 
0
Salaries and wages payable
 
0
Unearned rent revenue
 
6,000
Notes payable(due in 2015)
 
11,000
Interest payable
 
0
Notes payable (due after 2015)
 
35,000
Common stock
 
50,000
Retained earnings
 
63,000
Dividends
12,000
 
Sales revenue
 
910,000
Interest revenue
 
0
Rent revenue
 
0
Gain on disposal of plant assets
 
0
Bad debt expense
0
 
Cost of goods sold
630,000
 
 
 
 

 

.......and so on........

 

 

1. On May 1, 2014, Raymond purchased equipment for $13,000 plus sales taxes of $780 (all paid in cash).

2. On July 1, 2014, Raymond sold for $3,500 equipment which originally cost $5,000.
Accumulated depreciation on this equipment at January 1, 2014, was $1,800; 2014 depreciation prior to the sale of the equipment was $450.
3. On December 31, 2014, Raymond sold for $9,400 on account inventory that cost $6,600.
4. Raymond estimates that uncollectible accounts receivable at year-end is $4,000.
5. The note receivable is a one-year, 8% note dated April 1, 2014. No interest has been recorded.
6. The balance in prepaid insurance represents payment of a $4,400 6-month premium on October 1, 2014.

7. The building is being depreciated using the straight-line method over 40 years. The salvage value is $20,000.

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, 2014, is being depreciated using the straight-line method over 5 years, with a salvage value of $1,000.
10. The patent was acquired on January 1, 2014, and has a useful life of 10 years from that date.
11. Unpaid salaries and wages at December 31, 2014, total $2,200.
12. The unearned rent revenue of $6,000 was received on December 1, 2014, for 4 months rent.
13. Both the short-term and long-term notes payable are dated January 1, 2014, and carry a 9% interest rate. All interest is payable in the next 12 months.
14. Income tax expense was $17,000. It was unpaid at December 31.
 
 
Instructions
(a) Prepare journal entries for the transactions listed above.
(b) Prepare an updated December 31, 2014, trial balance.
(c) Prepare a 2014 income statement and a 2014 retained earnings statement.
(d) Prepare a December 31, 2014, classified balance sheet.
    • 8 years ago
    Raymond Company’s trial balance at December 31, 2014,
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