Hampton Corporation's balance sheet at December 31, 2011, is presented below.

Hampton Corporation

Balance Sheet

December 31, 2011

Cash $24,600

Accounts receivable $45,500

Allowance for doubtful accounts (1,500)

Supplies $4,400

Land $40,000

Buildings $142,000

Accumulated depreciation- buildings (22,000)

______________________________________________________

$233,000

_______________________________________________________

_______________________________________________________

Accounts payable $25,600

Common stock ($10 par) $80,000

Retained earnings $127,400

_______________________________

$233,000

_______________________________

_______________________________

During 2012, the following transactions occurred.

1. On January 1, 2012, Hampton also issued 1,200 shares of $40 pas, 7% preferred stock for $49,200.

2. On January 1, 2012, Hampton also issued 900 shares of the $10 par value common stock for $21,000

3. Hampton performed services for $320,000 on account.

4. On April 1,2012, Hampton collected fees of $36,000 in advance for services to be performed from April 1, 2012, to March 31, 2013.

5. Hampton collected $276,000 from customers on account.

6. Hampton bought $35,100 of supplies on account.

7. Hampton paid $32,200 on accounts payable.

8.Hampton reacquired 400 shares of its common stock on June 1, 2012, for $28 per share.

9. Paid other operating expenses of $188,200.

10. On December 31, 2012, Hampton declared the annual preferred stock dividend and a $1.20 per share dividend on the outstanding common stock, all payable on January 15, 2013.

11. An account receivable of $1,700 which originated in 2011 is written off as uncollectible.

Adjustment date:

1. A count of supplies indicates that $5,900 of supplies remain unused at year-end.

2. Recorded revenue earned from item 4 above.

3. The allowance for doubtful accounts should have a balance of $3,500 at year end.

4. Depreciation is recorded on the building on a straight-line basis based on a 30-year life and a salvage value of $10,000.

5. The income tax rate is 30%.

Instructions:

a) Prepare journal entires for the transactions listed above and adjusting entries.

b) Prepare an adjusted trial balance at December 31, 2012.

c) Prepare an income statement and a retained earnings statement for the year ending December 31, 2012, and a classified balance sheet as of December 31, 2012.

Hampton Corporation's balance sheet at December 31, 2011, is presented below.

Hampton Corporation

Balance Sheet

December 31, 2011

Cash $24,600

Accounts receivable $45,500

Allowance for doubtful accounts (1,500)

Supplies $4,400

Land $40,000

Buildings $142,000

Accumulated depreciation- buildings (22,000)

______________________________________________________

$233,000

_______________________________________________________

_______________________________________________________

Accounts payable $25,600

Common stock ($10 par) $80,000

Retained earnings $127,400

_______________________________

$233,000

_______________________________

_______________________________

During 2012, the following transactions occurred.

1. On January 1, 2012, Hampton also issued 1,200 shares of $40 pas, 7% preferred stock for $49,200.

2. On January 1, 2012, Hampton also issued 900 shares of the $10 par value common stock for $21,000

3. Hampton performed services for $320,000 on account.

4. On April 1,2012, Hampton collected fees of $36,000 in advance for services to be performed from April 1, 2012, to March 31, 2013.

5. Hampton collected $276,000 from customers on account.

6. Hampton bought $35,100 of supplies on account.

7. Hampton paid $32,200 on accounts payable.

8.Hampton reacquired 400 shares of its common stock on June 1, 2012, for $28 per share.

9. Paid other operating expenses of $188,200.

10. On December 31, 2012, Hampton declared the annual preferred stock dividend and a $1.20 per share dividend on the outstanding common stock, all payable on January 15, 2013.

11. An account receivable of $1,700 which originated in 2011 is written off as uncollectible.

Adjustment date:

1. A count of supplies indicates that $5,900 of supplies remain unused at year-end.

2. Recorded revenue earned from item 4 above.

3. The allowance for doubtful accounts should have a balance of $3,500 at year end.

4. Depreciation is recorded on the building on a straight-line basis based on a 30-year life and a salvage value of $10,000.

5. The income tax rate is 30%.

Instructions:

a) Prepare journal entires for the transactions listed above and adjusting entries.

b) Prepare an adjusted trial balance at December 31, 2012.

c) Prepare an income statement and a retained earnings statement for the year ending December 31, 2012, and a classified balance sheet as of December 31, 2012.