Nordham Corporation's trial balance at December 31, 2008, is presented below. All 2008 transactions have been recorded except for the items described 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 reacquired 300 shares of its common stock on July 1, 2008, for $49 per share.
4. On December 31, 2008, Nordham declared the annual preferred stock dividend and a $1.50 per share dividend on the outstanding common stock, all payable on January 15, 2009.
5. Nordham estimates that an uncollectible account receivable at year-end is $5,100.
6. The building is being depreciated using the straight-line method over 30 years. The salvage value is $5,000.
7. The equipment is being depreciated using the straight-line method over 10 years. The salvage value is $4,000.
8. The 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. The 10% bonds payable pay interest every January 1 and July 1. The interest for the 6 months ended December 31, 2008, has not been paid or recorded.
(Ignore income taxes.)
Questions:
a) Prepare journal entries for the transactions listed above.
b) Prepare an updated Dec 31st trial balance, reflecting the unrecorded transaction
c) Prepare a multiple-step income statement for the year ending Dec 31st
d) Prepare a retained earnings statement for the year ending Dec 31
e) Prepare a classified Balance sheet for Dec