Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

XS Company unadjusted trial balance at December 1, 2012 is presented below.

Account
Debit ( $)
Credit ( $)
Cash
142.000

Account Receivable
54,200

Inventory
32,700

Prepaid Insurance
24,000

Land
120.000

Buildings
250.000

Franchise rights
280,000

Allowance for doubtful accounts

13,000
Accumulated Depreciation - building

24.000
Account Payable

27.300
Notes payable ( due in 2016)

150.000
Capital

70,900
Drawing
20.000

Sales Revenue

1,500.000
Cost of Goods Sold
750,500

Other operating expenses
61.800

Salaries expenses
50.000

Total
1,785,200
1,785,200

The following transactions occurred during December:

Dec 2?Company accepted a 4 month, 8% note receivable from Alia Company in payment of Account receivable of $2,500.

Dec 5?Company collected $12,000 form customer on account

Dec 12?Company spent $120,000 in research and development cost to develop new product. A patent was granted for the product on December 15. Legal and other cost for the patent was $12,300.

Dec 15?Purchased a new machine that cost $140,000 on account. Company also pays cash for the following item: installation of $2,300; sales taxes of $750; lubricant oil $300; transportation cost of $1,200.
Dec 20?Paid $ 20,000 for the notes payable.

Dec 29?Purchased a rights to extract gold worth $15 million. The gold is estimated to be around 1,500,000 tons per year.


Adjustment data:-

1. Company use percentage of sales basis to estimate its bad debt. Company estimates 2% of net sales will be uncollectible at the end of the year.
2. Notes receivable is for one year, 8% note dated on April 1, 2012.
3. A one year Prepaid insurance was purchased on September 1, 2012
4. The building is being depreciated using the straight-line method over 30 years. The salvage value is $30,000.
5. The machine is being depreciated using double declining balance over 5 year period. The salvage value is 10% of the cost.
6. Franchise right will be amortized over a period of 20 years.
7. Patent will be amortized over a period of 40 years.
8. At the end of the year 350,000 tons of gold was extracted.
9. The note payable is dated June 30, 2012 with 10% interest rate.
10. Income taxes expenses were $15,000. It was unpaid at December 31, 2012.


Required:-
1. Prepare journal entry to record transactions for December.
2. Post the journal to ledger and prepare new unadjusted trial balance.
3. Prepare journal entry to record adjusting entry.
4. Prepare adjusted trial balance.
5. Prepare a 2012 income statement.

 

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M945506

Have any Question? 


Related Questions in Accounting Basics

Assignmentsongo dealers sells clothing and began trading

Assignment SONGO DEALERS sells clothing and began trading operations on 1 April 20X3. All amounts are paid by cheque, unless otherwise stated. The entity uses the perpetual inventory system and maintains a gross profit p ...

Ginos restaurant is a popular restaurant in boston

Gino's Restaurant is a popular restaurant in Boston, Massachusetts. The owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activity-based cos ...

You are starting your own internet business you decide to

You are starting your own Internet business. You decide to form a company that will sell cookbooks online. Justcookbooks.com is scheduled to launch 6 months from today. You estimate that the annual cost of this business ...

Key information for the plant city divisionkey information

Key Information For The Plant City Division Key information for the Plant City Division (PCD) of Barkley Industries for 2015 are as follows: Revenues $15,000,000 Operating Income 1,800,000 Total Assets 10,000,000 PCD man ...

Study guide1 what is the beta of a firm whose equity has an

STUDY GUIDE 1. What is the beta of a firm whose equity has an expected return of 21.30%, the risk-free rate is 7%, and the expected return on the stock market is 18%? 2. Two reasons for the agency problem in modern corpo ...

Assessment one - business research report proposal initial

Assessment One - Business Research Report Proposal: Initial Research Proposal The initial research proposal will consist of the following SIX (6) items: 1. Identify a business research topic 2. Define the research questi ...

Taskyou are required to complete all questions in the same

Task You are required to complete all questions, in the same sequence as listed below, and submit all workings. Follow the assignment requirements (refer below to the Requirements section above) very closely. Question 1 ...

Assignment gaap applicationsinternal controlrecall that in

Assignment: GAAP Applications Internal Control Recall that in Units 2 and 3, you completed the accounting cycle for Dustin Larkin of Quixote Consulting. Quixote Consulting is a part-time consulting business that recently ...

Question 1which entry would record the payment of a utility

Question 1 Which entry would record the payment of a utility bill? A. Debit Utilities Expense; credit Cash B. Debit Cash; credit Utilities Expense C. Debit Utilities Expense; credit Accounts Payable D. Debit Accounts Rec ...

Assignmentexercise 1 treatment of nsf checkthe bank

Assignment Exercise 1 Treatment Of NSF check The bank statement of Stone Supplies included a $300 NSF check that one of Stone's customer had written to pay for services that were provided by Stone. Required a. Show the e ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro