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

During 2012, the following transactions occurred.
1. On January 1, 2012, Hampton issued 1,200 shares of $40 par, 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 data:
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%. (Hint: Prepare the income statement up to income before taxes and multiply by 30% to compute the amount.)
Instructions (You may want to set up T accounts to determine ending balances.)

(a) Prepare journal entries 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.

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HAMPTON CORPORATION Balance Sheet December 31, 2011 Accounts payable Cash Accounts receivable $ 24,600 45,500 Common stock ($10 par) Allowance for doubtful Retained earnings accounts (1,500) Supplies 4,400 Land 40,000 Buildings 142,000 Accumulated depreciation- buildings (22,000) $233,000 $ 25,600 80,000 127,400 $233,000