1. $300,000 in sales on account had not been recorded but were shipped FOB Shipping Point on December 31. The cost of this inventory was $140,000. Bruce and Emmett use a perpetual inventory system.
2. Employees are allowed to carry over up to 10 days of earned vacation days per year up to 40 days. Employees earn an average of $150 per day. A total of 500 earned vacation days will be carried over to 2020. It is probable that the employees will take the vacation days.
3. Accrued wages at December 31, 2019 amount to $50,000.
4. You discover that a product sale was made and recorded in December for $50,000; the product had not yet been shipped. The cost of the product was $24,000.
5. The Prepaid Expense account balance includes the $24,000 cost of a two year insurance policy purchased on April 1, 2019. (Prepaid Expense was debited for $24,000 on April 1, 2019)
6. Depreciation & Amortization expense for the year is $150,000
7. Interest expense accrued on its long-term liabilities is $35,000.
8. A dividend of $40,000 was declared on December 16, to be paid on January 15, 2020
9. It is estimated that 5% of accounts receivable will be uncollectable.
10. Income tax expense is 30% of income before income tax.

INSTRUCTIONS:

1. Record the adjusting journal entries
2. Compute the adjusted trial balance amounts
3. Prepare in good form:
   1. Multiple Step Income Statement with an other gains and losses section
   2. Balance Sheet
   3. Retained Earnings Statement
4. Compute the following ratios: Current Ratio, Profit Margin on Sales, Debt to Assets, Earnings per Share, and Book Value per share
5. Record Closing Entries

	Bruce and Emmett Corporation
	Unadjusted Balances
	12/31/19
		Debit	Credit
101	Cash	$ 425,000
102	Cash Equivalents	$ 38,000
103	Accounts Receivable	$ 825,000
104	Allowance for Doubtful Accounts		$ 25,000
105	Inventory	$ 1,375,000
106	Prepaid expenses	$ 122,593
107	Other Current Assets	$ 25,531
121	Equipment	$ 487,000
122	Building	$ 875,000
123	Land	$ 310,000
124	Accumulated Depreciation		$ 457,500
125	Investments	$ 675,868
131	Goodwill	$ 175,000
132	Other Intangible Assets	$ 250,000
201	Accounts Payable		$ 1,144,925
202	Wages Payable		$ 80,000
204	Payroll taxes payable		$ 18,000
205	Interest Payable		$ 12,550
206	Dividends Payable		$ 50,000
207	Unearned Revenue		$ 187,500
210	Income Tax payable
212	Compensated Absence Payable
221	Long Term Liabilities		$ 688,500
301	Common Stock ($10 par)		$ 735,000
302	Paid-in Capital Common Stock		$ 157,500
310	Dividends	$ 50,000
315	Treasury Stock	$ 250,000
320	Retained Earnings		$ 369,700
401	Product Sales Revenue		$ 9,280,673
402	Service Revenue		$ 1,542,678
403	Sales Returns	$ 162,500
404	Sales Discounts	$ 269,500
420	Investment Income		$ 28,290
421	Gain/Loss on Disposal
501	Cost of Goods Sold	$ 5,100,000
601	Office Expenses	$ 215,000
602	Bad debts expenses	$ -
603	Equipment Repair Expense	$ 150,000
604	Advertising Expense	$ 168,500
605	Depreciation Expense
607	Legal Fees	$ 205,000
608	Office Wages Expense	$ 400,000
609	Accounting Consultants	$ 100,000
610	Property Taxes	$ 107,831
611	Maintenance Expense	$ 42,500
612	Dues and subscriptions Expense	$ 22,960
613	Telephone Expense	$ 20,199
614	Utilities Expenses	$ 78,000
615	Wages Expense	$ 962,000
616	Travel & Entertainment Expense	$ 220,000
617	Research & Development	$ 290,000
618	Insurance Expense	$ 85,000
619	Income Tax Expense
620	Payroll taxes Expense	$ 168,488
625	Compensated Absence Expense
695	Interest Expense	$ 47,500
699	Miscellaneous Expense	$ 78,846