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Q1) Nordham Corporation's trial balance at December 31, 2008, is given below. All 2008 transactions have been recorded except for items describeed below and on the next page.

 

  Debit Credit
Cash $ 23,000  
Accounts Receivable 51,000  
Merchandise Inventory 22,700  
Land 65,000  
Building 95,000  
Equipment 40,000  
Allowance for Doubtful Accounts   $    450
Accumulated Depreciation-Building   30,000
Accumulated Depreciation-Equipment   14,400
Accounts Payable   19,300
Bond Interest Payable   -0-
Dividends Payable   -0-
Unearned Rent Revenue   8,000
Bonds Payable (10%)   50,000
Common Stock ($10 par)   30,000
Paid-in Capital in Excess of Par-Common Stock   6,000
Preferred Stock ($20 par)   -0-
Paid-in Capital in Excess of Par-Preferred Stock   -0-
Retained Earnings   75,050
Treasury Stock -0-  
Dividends -0-  
Sales   570,000
Rent Revenue   -0-
Bad Debts Expense -0-  
Bond Interest Expense 2,500  
Cost of Goods Sold 400,000  
Depreciation Expense-Buildings -0-  
Depreciation Expense-Equipment -0-  
Other Operating Expenses 39,000  
Salaries Expense 65,000  
Total $803,200 $803,200

 

Unrecorded transactions

1. On January 1, 2008, Nordham issued 1,000 shares of $20 par, 6% preferred stock for $22,000.

2. On January 1, 2008, Nordham also issued 1,000 shares of common stock for $23,000.

3. Nordham obtained 300 shares of its common stock on July 1, 2008, for $49 per share.

4. On December 31, 2008, Nordham declared annual preferred stock dividend and a $1.50 per share dividend on outstanding common stock, all payable on January 15, 2009.

5. Nordham estimates that uncollectible account receivable at year-end is $5,100.

6. Building is being depreciated using straight-line method over 30 years. Salvage value is $5,000.

7. Equipment is being depreciated using straight-line method over 10 years. Salvage value is $4,000.

8. Unearned rent was collected on October 1, 2008. It was receipt of 4 months' rent in advance (October 1, 2008 through January 31, 2009).

9. 10% bonds payable pay interest every January 1 and July 1. Interest for 6 months ended December 31, 2008, has not been paid or recorded.

 

problems:

 

a) Create journal entries for transactions given above.

 

b) Create an updated Dec 31st trial balance, reflecting the unrecorded transaction

 

c) Create a multiple-step income statement for year ending Dec 31st 

 

d) Create a retained earnings statement for year ending dec 31 

 

e) Create a classified Balance sheet for Dec

Accounting Basics, Accounting

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