Assignments Required:
1) Making journal entries for each transaction in chronological order.
2) Prepare adjusting entries and adjusted trial balance.
3) Prepare Income Statement, Retained Earnings Statement, and Balance Sheet.
4) Making closing entries.
5) Put all your work on excel spreadsheet. Each group should submit one completed copy to Assignment tab.
The 2015 Balance Sheet of the Katy Co. is as follows:
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Katy Co.
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Balance Sheet
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As of December 31, 2015
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Current Assets
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Cash
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53,160
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Notes Receivable
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16,000
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Accounts Receivable
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41,800
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Less: Allowance for Doubtful Accounts
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(3,000)
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Inventories
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40,000
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Prepaid Insurance
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540
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Prepaid Rent
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500
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Total Current Assets
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149,000
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Non-Current Assets
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Long-term Investments
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Investments in held-for-maturity securities
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51,000
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Land held for future development
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45,500
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Property, Plant, and Equipment
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Land
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85,000
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Buildings
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675,000
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Less: Accumulated Depreciation
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(187,500)
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Intangible Assets
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Capitalized Development Costs
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8,000
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Goodwill
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76,000
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Other Identifiable Intangible Assets
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48,000
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Total Non-Current Assets
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801,000
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Total Assets
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950,000
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Current Liabilities
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Notes Payable
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110,000
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Accounts Payable
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33,500
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Unearned Revenue
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12,000
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Property Tax Payable
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6,600
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Interest Payable
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1,500
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Income Tax Payable
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9,440
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Salary and Wages Payable
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0
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Utilities Payable
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0
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Total Current Liabilities
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173,040
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Non-Current Liabilities
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Provisions Related to Pensions
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93,100
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Bonds Payable
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300,000
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Total Non-Current Liabilities
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393,100
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Total Liabilities
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566,140
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Stockholders' Equity
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Common Stock
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100,000
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Preferred Stock
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100,000
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Paid-in-capital - Common Stock
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27,500
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Paid-in-capital - Preferred Stock
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10,000
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Retained Earnings
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154,110
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Accumulated Other Comprehensive Income
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5,000
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Less: Treasury Stock
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(12,750)
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Total Stockholders' Equity
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383,860
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Total Liabilities and Stockholders' Equity
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950,000
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During 2016, the following events occurred in Katy Co.:
1) On January 10, sold merchandise on account to Abby $12,000 and Bob $9,000. Terms 2/10, n/30, F.O.B. shipping point.
2) On January 12, purchased merchandise on account from Charles $4,000 and David 3,500. Terms 1/10, n/30, F.O.B. destination.
3) On January 14, received checks, $4,500 from Esther and $2,500 from Fred, for sales on account after discount period has lapsed.
4) On January 15, send checks to James for 12,000 less 3% cash discount, and to Kimberly for $8,000 less 2% cash discount.
5) On January 16, issued credit of $500 to Bob for merchandise returned.
6) On January 21, paid off the balances to Charles and David for the purchases on January 12.
7) On February 9, received payment in full from Abby and Bob.
8) On March 1, paid rent of $4,800 for a two-year term starting from May 1, 2013.
9) On April 1, the company CEO paid $60,000 from her savings bank account to purchase a car for personal use.
10) On April 12, paid $1,200 cash for office supplies.
11) Cash dividends totaling $5,000 were declared on June 13 and paid to stockholders on June 23.
12) Issued a note of $120,000 to bank (one year, annual interest rate 4%) for cash on July 1.
13) On July 5, purchased merchandise from Kimberly $45,000, terms 3/10, n/30.
14) On July 7, issued common stock 1,000 shares, $10 par, in exchange of a land with a fair market value of $60,000.
15) On July 8, returned $500 of merchandise to Kimberly and received credit.
16) On August 1, sold merchandise to Linda on account $120,000, term 1/10, n/30, FOB shipping point.
17) Paid off the balance to Kimberly on August 4.
18) On August 8, paid utilities expense, $12,000.
19) On August 18, Linda paid off its balance.
20) On September 1, paid cash $7,500 to Mary for merchandise purchased last year.
21) On October 1, paid off notes payable $110,000 (issued in 2015) and associated interest $5,500 (including $1,500 interest payable on the balance sheet).
22) Over the year, daily cash sales were $16,000.
23) Over the year, sales and office employees earned $60,000 in salaries and wages, of which
$2,500 remained as payable at the end of year.
24) On Dec 31, received a utilities bill of $2,000 (for December 2016) and paid off the bill on January 10, 2016.
Additional Information at the end of 2016:
1) Depreciation expense for the year was $14,500.
2) The company estimated that it will pay federal income tax, $6,500.
3) After physically counting, the company decided that the ending inventory was $61,000.
4) Based on its historical data, the bad debts are about 1% of net credit sales.
5) Unearned revenue was decreased by $14,000.
6) The company expenses all of the supplies purchased during the year.
7) No insurance policy was effective during the year.
8) The company uses the gross method to record its purchases and sales on credit.
9) The company adopts the periodic inventory system.
10) Abby, Bob, and Linda had zero balance on account as of Jan 1, 2012.
Check Figures
Please use the following check figures for the project one:
1) Adjusted Trial Balance: Total $1,289,061
2) Earnings before income tax: 7,162
3) Retained Earnings: $154,162
4) Total assets: $947,452
5) Total liabilities: 547,540