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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