1) Prepare journal entries for the transactions, adjustments and closing entries necessary to complete the statements.

2) Prepare the financial statements (Income statement and Balance Sheet) for Cassia Company for year B

2 1) Prepare journal entries for the transactions, adjustments and closing entries necessary to complete the statements. 3 2) Prepare the financial statements (Income statement and Balance Sheet) for Cassia Company for year B Year B: 5 A company reported the following beginning balances: 6 Cash During Year B the following events occurred Cassia performed services on account Cassia collected cash from customers Cassie reported operating expenses paid in cash Cassie estimates bad debt expense at 3% of credit sales. 140,000 72,000 10000 13000 5000 24000 2400 4000 5600 49200 8 allowance for doubt acct 9 Equipment 0 less accumulated depreciation 1 Prepaid insurance 2 Patent (4-year remaining life 3 4 5 Accounts pavable 6 Unearned revenue 7 Common stock 5000 shares 8 with a Par value of $2 9 Additional paid-in-capital 0 Retained earnings 1 Total liabilities and SHE 2 3 Assume all accounts have normal balances. 4 5 6 23000 Other events during the year include: 1/1/YR B Cassia wrote off accounts receivable as uncollectible Cassia entered into a 5-year noncancellable lease The lease requires annual payments on 1/1 each year The equipment had a cash price of $45,000 and the company calculated payments based on 12% expected returns Further, Cassia depreciates leased assets using straight-line depreciation. Cassia issued ten $1000 bonds in exchange for cash. The bonds are issued at par and pay interest on 12/31 and 6/31 The bonds mature in 5 years Cassia purchased a additional equipment Cassia paid cash for the equipment. Cassia purchase $3000 in stock, holding the stock as a trading investment. Cassia repurchased 1000 shares of common stock for treasury Cassia sold equipment with an original cost of $5000 and a book value of $4000 for $6400 cash 3700 Total assets 12000 9000 Hint: Find the payment and the amortization table 7/1/Year B 10000 7000 11200 49200 Stated rate 5%. Market rate 8% 7/1/YR B $22,000 10/1/Year B 11/1/Year B 12/31/YR B 7 8