Q1. Balance Sheet Preparation
Presented below is the adjusted trial balance of Kelly Corporation at December 31, 2017.
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Debit
|
Credit
|
|
Cash
|
$ ?
|
|
|
Supplies
|
1,200
|
|
|
Prepaid Insurance
|
1,000
|
|
|
Equipment
|
48,000
|
|
|
Accumulated Depreciation-Equipment
|
|
$4,000
|
|
Trademarks
|
950
|
|
|
Accounts Payable
|
|
10,000
|
|
Salaries and Wages Payable
|
|
500
|
|
Unearned Service Revenue
|
|
2,000
|
|
Bonds Payable (due 2024)
|
|
9,000
|
|
Common Stock
|
|
10,000
|
|
Retained Earnings
|
|
25,000
|
|
Service Revenue
|
|
10,000
|
|
Salaries and Wages Expense
|
9,000
|
|
|
Insurance Expense
|
1,400
|
|
|
Rent Expense
|
1,200
|
|
|
Interest Expense
|
900
|
|
|
Total
|
$ ?
|
$?
|
Additional information:
1. Net loss for the year was $2,500.
2. No dividends were declared during 2017.
Instructions - Prepare a classified balance sheet as of December 31, 2017.
Q2. Balance Sheet Preparation
Presented below are a number of balance sheet items for Montoya, Inc., follow the current year, 2017.
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Goodwill
|
$125,000
|
Accumulated depreciation-equipment
|
$292,000
|
|
Payroll taxes payable
|
177,591
|
Inventory
|
239,800
|
|
Bonds payable
|
300,000
|
Rent payable (short-term)
|
45,000
|
|
Discount on bonds payable
|
15,000
|
Income taxes payable
|
98,362
|
|
Cash
|
360,000
|
Rent payable (long-term)
|
480,000
|
|
Land
|
480,000
|
Common stock, $1 par value
|
200,000
|
|
Notes receivable
|
445,700
|
Preferred stock, $10 par value
|
150,000
|
|
Notes payable (to banks)
|
265,000
|
Prepaid expenses
|
87,920
|
|
Accounts payable
|
490,000
|
Equipment
|
1,470,000
|
|
Retained earnings
|
?
|
Debt investments (trading)
|
121,000
|
|
Income taxes receivable
|
97,630
|
Accumulated depreciation-buildings
|
270,200
|
|
Notes payable (long-term)
|
1,600,000
|
Buildings
|
1,640,000
|
Instructions - Prepare a classified balance sheet in good form. Common stock authorized was 400,000 shares, and preferred stock authorized was 20,000 shares. Assume that notes receivable and notes payable are short-term, unless stated otherwise. Cost and fair value of equity investments (trading) are the same.
Q3. Multiple-Step and Single-Step Statements
Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2017 information related to P. Bride Company ($000 omitted).
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Administrative expense
|
|
|
Officers' salaries
|
$4,900
|
|
Depreciation of office furniture and equipment
|
3,960
|
|
Cost of goods sold
|
60,570
|
|
Rent revenue
|
17,230
|
|
Selling expense
|
|
|
Delivery expense
|
2,690
|
|
Sales commissions
|
7,980
|
|
Depreciation of sales equipment
|
6,480
|
|
Sales revenue
|
96,500
|
|
Income tax
|
9,070
|
|
Interest expense
|
1,860
|
Instructions:
(a) Prepare an income statement for the year 2017 using the multiple-step form. Common shares outstanding for 2017 total 40,550 (000 omitted).
(b) Prepare an income statement for the year 2017 using the single-step form.
(c) Which one do you prefer? Discuss.
Q4. Comprehensive Income
Roxanne Carter Corporation reported the following for 2017: net sales $1,200,000, cost of goods sold $750,000, selling and administrative expenses $320,000, and an unrealized holding gain on available-for-sale securities $18,000.
Instructions - Prepare a statement of comprehensive income, using (a) the one statement format, and (b) the two statement format. (Ignore income taxes and earnings per share.)
Q5. Comprehensive Income
C. Reither Co. reports the following information for 2017: sales revenue $700,000, cost o goods sold $500,000, operating expenses $80,000 and an unrealized holding loss on available-for-sale securities for 2017 of $60,000. It declared and paid a cash dividend of $10,000 in 2017.
C. Reither Co. has January 1, 2017, balances in common stock $350,000; accumulated other comprehensive income $80,000; and retained earnings $90,000. It issued no stock during 2017.
Instructions - Prepare a statement of stockholders' equity.