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OLTAIRE CORPORATION
Balance Sheet
December 31, 2013
Cash $24,600 Accounts payable $25,600
Accounts receivable 45,500 Common stock ($1 par) 50,000
Allowance for doubtful accounts (1,500 ) Retained earnings 147,400
Supplies 4,400
Land 40,000
Buildings 130,000
Accumulated depreciation-buildings (20,000 )
$223,000 $223,000

During 2014, the following transactions occurred.

1. On January 1, 2014, Voltaire issued 1,500 shares of $20 par, 6% preferred stock for $33,000.
2. On January 1, 2014, Voltaire also issued 900 shares of the $1 par value common stock for $6,300.
3. Voltaire performed services for $276,000 on account.
4. On April 1, 2014, Voltaire collected fees of $36,000 in advance for services to be performed from April 1, 2014, to March 31, 2015.
5. Voltaire collected $267,000 from customers on account.
6. Voltaire bought $26,100 of supplies on account.
7. Voltaire paid $32,200 on accounts payable.
8. Voltaire reacquired 400 shares of its common stock on June 1, 2014, for $8 per share.
9. Paid other operating expenses of $188,200.
10. On December 31, 2014, Voltaire declared the annual preferred stock dividend and a $0.50 per share dividend on the outstanding common stock, all payable on January 15, 2015.
11. An account receivable of $1,300 which originated in 2013 is written off as uncollectible.

Adjustment data:

12. A count of supplies indicates that $5,900 of supplies remain unused at year-end.
13. Recorded revenue recognized from item 4 above.
14. The allowance for doubtful accounts should have a balance of $3,500 at year end.
15. Depreciation is recorded on the building on a straight-line basis based on a 30-year life and a salvage value of $10,000.
16. The income tax rate is 30%. (Hint: Prepare the income statement up to income before taxes and multiply by 30% to compute the amount.)
Prepare journal entries for the transactions listed above and adjusting entries.
Prepare an income statement
Prepare a retained earnings statement for the year ending December 31, 2014
Prepare a classified balance sheet as of December 31, 2014

 

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M939958

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