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

Infrastructure and gasb statement1 answer the following

Infrastructure and GASB Statement 1. Answer the following questions with regard to infrastructure: A) What is infrastructure? B) What are two methods that might be used to record infrastructure expense from year to year? ...

Question 1a firms legal capital is defined as the par value

Question 1 A firm's legal capital is defined as the par value of its common stock. The following table represents a scaled version of the equity account of FIRM XYZ: Common stock at par R 136586 Paid-in capital in excess ...

Agrichem industries manufactures fertilizer concentrate and

AgriChem Industries manufactures fertilizer concentrate and uses cost standards. The fertilizer is produced in 500-pound batches; the normal level of production is 250 batches of fertilizer per month. The standard costs ...

Imagine you are the responsible accountant for one of our

Imagine you are the responsible accountant for one of our companies. Apart from local gaap or local accounting rules but with regard to HB II (Group financial statement) and with the help of the HB II accounting manual o ...

Assignmentguidelines for individual case assignment cutting

Assignment Guidelines for Individual Case Assignment: Cutting Edge Instructions This is an individual assignment and therefore must be completed by the individual student without outside assistance. In order to complete ...

Internal control procedures are required for all

Internal control procedures are required for all transaction cycles within an accounting cycle. This week you are addressing the control procedures that would be the most effective in the general ledger and reporting sys ...

Individual research papercompany case study assignmentthis

Individual Research Paper Company Case Study Assignment This assignment has a number of learning objectives, sources, and opportunities: 1. You will explore financial performance and investor information available fromva ...

District water company issued 10-year bonds with a face

District Water Company issued 10-year bonds with a face value of $100,000 and a stated interest rate of 8.0%. The bonds are dated April 1, 2016, and call for semiannual interest payments on each April 1 and October 1. Du ...

Accounting cycle project transaction practice set - bampg

Accounting Cycle Project Transaction Practice Set - B&G Music You have been hired as an accountant for B&G Co., a corporation performing diverse consulting services in Detroit, Michigan. B&G Co. prepares financial statem ...

Problem 3-2 lo 2 simple equity method adjustments

Problem 3-2 (LO 2) Simple equity method adjustments, consolidated worksheet. On January 1, 2015, Paro Company purchases 80% of the common stock of Solar Company for $320,000. Solar has common stock, other paid-in capital ...

  • 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