1. Sales and Accounts Receivable A. The sales price of each hat was $39. All sales were on account. B. Cash collections on account amounted to $43,960. C. The company identified $250 of receivables as being uncollectible and wrote them off. D. The company follows a percentage-of-receivables approach to estimate its accounts receivable that will become uncollectible. As of the end of 2049, the company estimates that 8% of its receivables will be uncollectible. 2. Inventory A. The company began the year with 200 hats which had a cost of $10.00 each. The following purchases (all on account) were made during 2049: January 15 - 525 hats @ $11.00 each March 23-365 hats @ 12.00 each July 2 - 430 hats @ $13.50 each October 31 - 450 hats @ $14.00 each B. Employees performed a physical count at end of 2049 and found that 480 hats remained in the warehouse. The company uses a periodic LIFO inventory system. C. The company made cash payments to inventory suppliers totaling $19,000. 3. Property, Plant and Equipment A. Below is a schedule of the store fixtures and office equipment the company had in place at the end of 20Y8. Straight- line depreciation is used for all store fixtures and office equipment. PROPERTY, PLANT & EQUIPMENT (as of December 31, 20Y8) Asset ID # Historical Cost Useful Life Salvage Value Date Acquired 1256 $18,500 6 years $500 Jan. 1, 20Y4 1876 $2,600 $200 Jan. 1, 2047 4299 $31,000 $1,000 Jan. 1, 20Y8 B. On January 1, new store fixtures were purchased for $5,000 in cash. The company expects the fixtures to have a 5- year useful life and a $500 salvage value. C. On July 1, office equipment (ID#1256) was sold for $1,800. 3 years 5 years 4. Debt A. On October 1, 2049, the company paid-off the note payable that was outstanding at the beginning of the period. The note was issued on October 1, 2048 with a 6% interest rate. It required semi-annual interest payments on March 31 and September 30. B. On November 1, 2049, the company borrowed $4,500 on a new 1-year note payable. This note carries a 4% interest rate with similar payment terms as the note that was just paid-off. 5. Operations A. Once any prepaid rent from 2048 was used, two more rent payments of $4,800 were made on March 1 and September 1 of 20y9 for their store building. Each rent payment is prepaid for six months. The balance in the prepaid account at the end of 2049 represents the rent for January and February 20Y10. B. Cash paid out for wages during 2049 totaled $11,600. Records indicate that salaries for the last week of December amounted to $200 and would be paid at the end of the first week in January (a two-week pay period). C. Other expenses that were paid in cash totaled $1,750. 5. Income Taxes A. The company paid its 20Y8 income taxes in March of 2049. B. The company has a 30% income tax rate for both 2048 and 2049. Common Stock A. Dividends of $2,200 were declared and paid during 2049. B. New common stock was issued for $15,000 during 2049. 1. Sales and Accounts Receivable A. The sales price of each hat was $39. All sales were on account. B. Cash collections on account amounted to $43,960. C. The company identified $250 of receivables as being uncollectible and wrote them off. D. The company follows a percentage-of-receivables approach to estimate its accounts receivable that will become uncollectible. As of the end of 2049, the company estimates that 8% of its receivables will be uncollectible. 2. Inventory A. The company began the year with 200 hats which had a cost of $10.00 each. The following purchases (all on account) were made during 2049: January 15 - 525 hats @ $11.00 each March 23-365 hats @ 12.00 each July 2 - 430 hats @ $13.50 each October 31 - 450 hats @ $14.00 each B. Employees performed a physical count at end of 2049 and found that 480 hats remained in the warehouse. The company uses a periodic LIFO inventory system. C. The company made cash payments to inventory suppliers totaling $19,000. 3. Property, Plant and Equipment A. Below is a schedule of the store fixtures and office equipment the company had in place at the end of 20Y8. Straight- line depreciation is used for all store fixtures and office equipment. PROPERTY, PLANT & EQUIPMENT (as of December 31, 20Y8) Asset ID # Historical Cost Useful Life Salvage Value Date Acquired 1256 $18,500 6 years $500 Jan. 1, 20Y4 1876 $2,600 $200 Jan. 1, 2047 4299 $31,000 $1,000 Jan. 1, 20Y8 B. On January 1, new store fixtures were purchased for $5,000 in cash. The company expects the fixtures to have a 5- year useful life and a $500 salvage value. C. On July 1, office equipment (ID#1256) was sold for $1,800. 3 years 5 years 4. Debt A. On October 1, 2049, the company paid-off the note payable that was outstanding at the beginning of the period. The note was issued on October 1, 2048 with a 6% interest rate. It required semi-annual interest payments on March 31 and September 30. B. On November 1, 2049, the company borrowed $4,500 on a new 1-year note payable. This note carries a 4% interest rate with similar payment terms as the note that was just paid-off. 5. Operations A. Once any prepaid rent from 2048 was used, two more rent payments of $4,800 were made on March 1 and September 1 of 20y9 for their store building. Each rent payment is prepaid for six months. The balance in the prepaid account at the end of 2049 represents the rent for January and February 20Y10. B. Cash paid out for wages during 2049 totaled $11,600. Records indicate that salaries for the last week of December amounted to $200 and would be paid at the end of the first week in January (a two-week pay period). C. Other expenses that were paid in cash totaled $1,750. 5. Income Taxes A. The company paid its 20Y8 income taxes in March of 2049. B. The company has a 30% income tax rate for both 2048 and 2049. Common Stock A. Dividends of $2,200 were declared and paid during 2049. B. New common stock was issued for $15,000 during 2049