Assignment
The following trial balance was taken from the books of COYOTE Co. on Dec. 31, 2016.
Account Debit Credit
Cash $10,000
Accounts receivable 50,000
Allowance for doubtful accounts $ 2,000
Prepaid insurance 30,000
Inventory, January 1, 2016 50,000
Furniture and equipment 290,000
Accumulated depreciation 140,000
Patents 50,000
Copyrights 30,000
Accounts payable 38,000
Accrued expenses 30,000
Bonds payable 50,000
Common stock 60,000
Retained earnings 20,000
Dividends 30,000
Sales 400,000
Rental revenue 50,000
Loss on fire (extra ordinary) 10,000
Purchase 200,000
Salary expense 70,000
Rent expense 30,000
Totals 820,000 820,000
At the year end, the following items have not been recorded.
a. Prepaid insurance expired during the 2016, $22,000.
b. Estimated bad debts expense for 2016 is $1,000.
c. Five month rent of $30,000 was paid in advance on September 1, 2016 and charged to rent expense then.
d. Inventory as of December 31, 2016, $40,000 (using periodic inventory procedure).
d. Furniture and equipment have an average useful life of 4 years and salvage value of $10,000. Use the straight line method.
e. Utility bill of $3,000 for the month of December 2016 will be paid on its due date, January 10, 2015.
f. Office salaries accrued but not yet paid by December 31, 2016 are $4,000.
g. The tax rate is 30%.
Instruction:
1) Prepare any necessary adjusting entries.
2) Prepare income statement, statement of retained earnings, & balance sheet of COYOTE Company for the year 2016.
3) Prepare closing entries of COYOTE for the year 2016.
4) Presume the above trial balance is an adjusted trial balance, and prepare Multiple step income statement and Multiple step balance sheet.