Question:
| Need help on these adjusting entries please. |
Unadjusted |
|
|
Adjusted |
| Account Title |
Trial Balance |
Adjustments |
Trial Balance |
|
DR |
CR |
DR |
CR |
DR |
CR |
| Cash |
240,300 |
- |
|
|
|
|
| Accounts Receivable |
925,000 |
- |
|
|
|
|
| Allowance for Doubtful Accounts |
- |
49,000 |
|
|
|
|
| Interest Receivable |
- |
|
|
|
|
|
| Merchandise Inventory |
187,500 |
- |
|
|
|
|
| Prepaid Insurance |
9,000 |
- |
|
|
|
|
| Prepaid Advertising |
- |
- |
|
|
|
|
| Prepaid Rent |
- |
- |
|
|
|
|
| Office Supplies |
7,800 |
- |
|
|
|
|
| Note Receivable |
75,000 |
- |
|
|
|
|
| Available for Sale Securities |
380,000 |
- |
|
|
|
|
| Office Building |
4,250,000 |
- |
|
|
|
|
| Accumulated Depreciation - Office Building |
- |
221,500 |
|
|
|
|
| Storage Building |
1,650,000 |
- |
|
|
|
|
| Accumulated Depreciation - Storage Building |
- |
- |
|
|
|
|
| Land |
450,000 |
- |
|
|
|
|
| Leasehold Improvements |
190,000 |
- |
|
|
|
|
| Accumulated Depreciation - Leasehold Improvements |
- |
- |
|
|
|
|
| Office Equipment |
125,000 |
- |
|
|
|
|
| Accumulated Depreciation - Office Equipment |
- |
42,000 |
|
|
|
|
| Patent |
250,000 |
- |
|
|
|
|
| Accounts Payable |
- |
145,000 |
|
|
|
|
| Sales Tax Payable |
- |
- |
|
|
|
|
| Salaries Payable |
- |
- |
|
|
|
|
| Payroll Taxes Payable |
- |
- |
|
|
|
|
| Interest Payable |
- |
- |
|
|
|
|
| Income Tax Payable |
- |
- |
|
|
|
|
| Unearned Rent Revenue |
- |
96,000 |
|
|
|
|
| Loan Payable - Onstar Bank |
- |
500,000 |
|
|
|
|
| Loan Payable - Coldstar Bank |
- |
2,250,000 |
|
|
|
|
| Common Stock |
- |
425,000 |
|
|
|
|
| Additional Paid in Capital |
- |
2,800,000 |
|
|
|
|
| Retained Earnings |
- |
1,379,420 |
|
|
|
|
| Accumulated Other Comprehensive Income |
- |
8,500 |
|
|
|
|
| Dividends |
280,000 |
- |
|
|
|
|
| Sales |
- |
4,380,250 |
|
|
|
|
| Sales Returns and Allowances |
19,500 |
- |
|
|
|
|
| Sales Discounts |
14,600 |
- |
|
|
|
|
| Cost of Goods Sold |
1,817,900 |
- |
|
|
|
|
| Sales Salaries Expense |
676,400 |
- |
|
|
|
|
| Office Salaries Expense |
434,000 |
- |
|
|
|
|
| Advertising Expense |
54,000 |
- |
|
|
|
|
| Depreciation Expense - Office Building |
- |
- |
|
|
|
|
| Depreciation Expense - Leasehold Improvements |
- |
- |
|
|
|
|
| Depreciation Expense - Office Equipment |
- |
- |
|
|
|
|
| Leasing Expense - Stores |
132,000 |
- |
|
|
|
|
| Miscellaneous Selling Expense |
16,950 |
- |
|
|
|
|
| Rent Expense - Storage Facility |
18,000 |
- |
|
|
|
|
| Insurance Expense |
2,000 |
- |
|
|
|
|
| Office Supplies Expense |
28,500 |
- |
|
|
|
|
| Warranty Expense |
5,000 |
|
|
|
|
|
| Miscellaneous Administrative Expense |
9,220 |
- |
|
|
|
|
| Rent Revenue |
- |
- |
|
|
|
|
| Interest Revenue on Note Receivable |
- |
- |
|
|
|
|
| Dividend Revenue on AFS Securities |
- |
18,000 |
|
|
|
|
| Bad Debt Expense |
67,000 |
- |
|
|
|
|
|
12,314,670 |
12,314,670 |
|
|
|
|
1. After reviewing details of sales, you note that the sales taxes collected on the last week of December's sales were included in sales revenue. Sales recorded the last week of December that included the sales tax of 12% (enter your birthday month plus 1) amounted to $185,000.
2. On November 1, 2017 (enter your birthday month), DeeDee recorded a patent in the amount of $250,000. The company paid outside legal fees of $120,000 to have the patent registered. The other $130,000 represents internal costs in developing the patent. The patent is good for 20 years, but the company estimates that the patent will have a useful life of 8 years with no residual value. No one knows what to do with this information so no amortization has been recorded for 2017. Amortization is straight line and the company depreciates using partial years for intangible assets.
3. The storage building was self-constructed this year by DeeDee. The Company had their initial expenditure of $700,000 on January 1. They paid an additional $500,000 on March 1st , $300,000 on June 1st, and then the final payment of $150,000 on August 1st. when the building was completed and occupancy occurred. Payments to contractor were properly capitalized. The company has decided to use S/L method for depreciation. The storage building is estimated to have a life of 30 years and a savage value of $250,000. The company will take a full year of depreciation in year of acquisition.
4. You note that Leasehold Improvements have not been depreciated for this year. DeeDee started to lease some new retail space in 2017 and added shelving and fixtures to this leased space. Based on your review of invoices, the previous accountant capitalized the cost of fixtures but did not capitalize the shipping and installation costs of $5,459 ((enter the last three digits of your student number in place of the XXX). These costs were expensed and recorded as a miscellaneous administrative expense. DeeDee has decided to use double declining balance (DDB) depreciation for this item and to take a full year of depreciation in the year of acquisition. The leasehold improvements have a useful life of 15 years with a salvage value of $10,000.