A B 1 2 Instructions 3 Pane in the Glass Company (Pane) is a glass manufacturer based out of California. They produce 4 a number of glass products including car windows and windshields, windows for houses, 5 stained glass windows, and a number of other specialty products. The following information 6 pertains to the fiscal year ending December 31, 2018: 7 8 9 At the beginning of the 2018, the company's 1/1/2018 trial balance was as follows: 10 Number Title Debit Credit 11 100 Cash $ 450,000,000 12 110 Accounts Receivable $ 33,000,000 13 115 Allowance For Bad Debts $ 1,240,000 14 120 Inventory $ 12,345,000 15 135 Accumulated Depreciation $ 72,422,000 16 140 Equipment 17 160 Buildings $ 18 170 Land 19 180 Patents 5555 105,000,000 1,000,000 $ 2,567,000 $ 80,000 20 185 Accumulated Amortization $ 50,000 21 200 Accounts Payable $ 70,050,000 22 300 Common Stock $ 120,000,000 23 24 310 Additional Paid In Capital 340 Retained Earnngs $ 267,000,000 $ 73,230,000 25 $ 603,992,000 $ 603,992,000 26 Company Info Chart of Accounts Transactions Journal Entries T-Accounts Adjusted Trial Balance Ready A B 27 Other assumptions for the year D a. Depreciation and amortization are computed using the straight line method. 28 29 b. Pane uses a perpetual system to track their inventory. 30 C. 31 Pane uses the percentage of receivables method to estimate their bad debt expense d. Pane has a year end of December 31, 2018 32 33 As the accountant for Pane in the Glass company, you have been asked to do the following: 34 35 36 37 38 1. Evaluate the following information and transactions listed on the "Transactions" tab and make the necessary journal entries in the "Journal Entries" tab. You should only use the accounts listed on the "Chart of Accounts" tab in your journal entries. 2. Post the journal entries into the appropriate t-accounts in the "T-Accounts" tab 39 40 41 3. Prepare the adjusting journal entries in the "Journal Entries" tab 42 43 4. Post the adjusting journal entries to the appropriate t-accounts in the "T-Accounts" tab 44 45 5. Prepare the income statement using the "Adjusted Trial Balance" tab 46 47 6. Prepare your closing journal entries in the "Journal Entries- Closing" tab 48 49 7. Post the closing entries into the appropriate accounts on the "T-Accounts- Closing" tab 50 51 8. Use the Post Closing trial balance to prepare the Balance Sheet 52 Company Info Chart of Accounts Transactions Journal Entries T-Accounts Adjusted Trial Balar Ready Instructions: 1. Prepare the journal entries for transactions A-T below and record them on the "Journal Entries" tab. 2. Once you have created the journal entries, post them to the "T-Accounts" tab. 3. Prepare journal entries for adjusting journal entries 1-6. 4. Post the adjusting entries to the correct T-Accounts in the "T-Accounts" tab. Transaction No. Transaction A January 1: Pane purchases inventory on account to make stained glass windows. The contract has terms of 2/10, n/30. The goods were purchased under the shipping terms of FOB destination. Inventory Purchased Shipping Cost $9,750,000 $5,050 B January 3: Pane receives rent for the 2 years from a tenant who rents one of their empty warehouses. Total Rent Paid $63,000 B 9 C January 5: Pane pays for the inventory purchased in transaction A. D 1 D February 12: Pane purchased a one year insurance policy on account with coverage beginning on March 1. 2 3 Insurance Policy $20,000 4 5 6 E March 1: Pane purchases additional inventory on account to make stained glass windows. The goods were purchased under the shipping terms of FOB shipping point. 27 28 29 Inventory Purchased Shipping Cost $12,325,000 $9,000 30 Company Info Chart of Accounts Transactions Journal Entries T-Accounts Adjusted Trial Balance Jou Ready Instructions: 1. Prepare the journal entries for transactions A-T below and record them on the "Journal Entries" tab. 2. Once you have created the journal entries, post them to the "T-Accounts" tab. 3. Prepare journal entries for adjusting journal entries 1-6. 4. Post the adjusting entries to the correct T-Accounts in the "T-Accounts" tab. Transaction No. Transaction F May 31: Pane sells window panes to customers. Some customers paid in cash, others purchased their goods on account. Pane uses the perpetual method to track their inventory. Cash Sales Sales on account Cost of Goods Sold G June 1: Pane pays for the inventory purchased in transaction E. H 2 B 4 5 6 7 5,367,000 40,054,000 13,250,000 July 1: Pane pays cash for a patent that will allow them to produce a revolutionary new window for boats and other marine vehicles called "T-Panes". Cost of Patent Remaining legal life of patent (in years) July 28: Pane issued shares of common stock $90,000 9 8 9 0 Number of shares 1 Par Value Price Per Share 5,230 $2 $124 2 Company Info Chart of Accounts Transactions Journal Entries T-Accounts Adjusted Trial Balance Ready Instructions: 1. Prepare the journal entries for transactions A-T below and record them on the "Journal Entries" tab. 2. Once you have created the journal entries, post them to the "T-Accounts" tab. 3. Prepare journal entries for adjusting journal entries 1-6. 4. Post the adjusting entries to the correct T-Accounts in the "T-Accounts" tab. Transaction No. Transaction J August 6: Pane purchases land with cash. At the time of purchase, Pane also had to pay for survey fees related to the land. K Cost of Land Survey Fees $124,000 $600 November 1: Pane lends one of their employees $200,000 in exchange for a note receivable. The employee is required to pay Pane back for the principal and interest on September 1, 2019. Principal Interest Rate Maturity Date L November 15: Pane sales additional goods to customers on account. M Sales on account Cost of Goods Sold $200,000 9% 9/1/2019 December 1: Pane puchases a piece of machinery with cash that will assist in making "T-Panes" $20,000,000 $6,350,000 Cost of Machinery Installation Fees $890,000 $4,250 Company Info Transportation Costs Chart of Accounts $1,030 Transactions Journal Entries T-Accounts Adjusted Trial Balance Journal eady Instructions: 1. Prepare the journal entries for transactions A-T below and record them on the "Journal Entries" tab. 2. Once you have created the journal entries, post them to the "T-Accounts" tab. 3. Prepare journal entries for adjusting journal entries 1-6. 4. Post the adjusting entries to the correct T-Accounts in the "T-Accounts" tab. ransaction No. Transaction M December 1: Pane puchases a piece of machinery with cash that will assist in making "T-Panes" Cost of Machinery Installation Fees Transportation Costs N December 10: Pane collects a portion of their accounts receivable $890,000 $4,250 $1,030 Amount collected $43,758,000 December 18: Pane sold a piece of their equipment for $10,000 in exchange for cash. Sale Price $10,000 Equipment Historical Cost $55,000 $38,000 Accumulated Depreciation for this equipment P December 31: Pane paid the IRS their 2018 income tax. Income Tax Paid Q $2,000,000 The payroll information for the year is shown below. All salaries and wages were previously paid for in cash, however this activity has not been recorded on Pane's books. Company Info Chart of Accounts Transactions Journal Entries T-Accounts Adjusted Trial Balance Jou Instructions: 1. Prepare the journal entries for transactions A-T below and record them on the "Journal Entries" tab. 2. Once you have created the journal entries, post them to the "T-Accounts" tab. 3. Prepare journal entries for adjusting journal entries 1-6. 4. Post the adjusting entries to the correct T-Accounts in the "T-Accounts" tab. ransaction No. Transaction Q The payroll information for the year is shown below. All salaries and wages were previously paid for in cash, however this activity has not been recorded on Pane's books. Number of Employees Employee payment (daily) Days worked in the current year 200 $175 250 S On December 31, Pane was notified that their one of their customers filed bankruptcy and would not be able to pay off their $3,000 T On December 31, Pane paid cash dividends of $8,000 to its shareholders. STOP: Post each of the preceding journal entries to the appropriate T-Accounts before preparing the adjusting journal entries Year-End Adjusting Entries: 1 Recognize the revenue earned from the rent paid in transaction B. y 2 Recognize the expiration of the prepaid insurance policy, purchased in transaction D. 3 Recognize the interest earned on the note receivable issued in transaction K 4 Record the bad debt expense for the year, assuming uses 3% of accounts receivable to estimate their uncollectible accounts. Chart of Accounts Transactions Journal Entries T-Accounts Adjusted Trial Balance Company Info Journal Entries Instructions: 1. Prepare the journal entries for transactions A-T below and record them on the "Journal Entries" tab. 2. Once you have created the journal entries, post them to the "T-Accounts" tab. 3. Prepare journal entries for adjusting journal entries 1-6. 4. Post the adjusting entries to the correct T-Accounts in the "T-Accounts" tab. 3 Transaction No. Transaction 03 04 Year-End Adjusting Entries: 05 Recognize the revenue earned from the rent paid in transaction B. 06 1 07 08 2 Recognize the expiration of the prepaid insurance policy, purchased in transaction D. 09 10 3 Recognize the interest earned on the note receivable issued in transaction K 11 12 Record the bad debt expense for the year, assuming uses 3% of accounts receivable to estimate their uncollectible accounts. 13 14 5 Depreciation Expense for the year is 2,556,000 15 16 6 Amortization Expense for the year is 3,000 17 118 Post each of the adjusting journal entries to the appropriate T-Accounts- DO NOT prepare closing journal entries yet 119 120 121 122 123 124 Company Info Chart of Accounts Transactions Journal Entries T-Accounts Adjusted Trial Balance Journal En ransactio n No. A Dr. Cr. B Dr. Cr. C Dr. Cr. Cr. D Dr. Cr. E Dr. Cr. F Dr. Cr. dy Dr. Dr. Journal Entries Account Name Debit Credit Company Info Chart of Accounts Transactions Nournal Entries T-Accounts Adjusted Trial Balance Jou A B F G H C G Dr. Cr. H Dr. Cr. I Dr. Cr. Cr. J Dr. Cr. K Dr. Cr. L Dr. Cr. Dr. M Dr. Cr. Cr. N Dr. Company Info Chart of Accounts Transactions ournal Entries T-Accounts Adjusted Trial Balance Jou A BC M Dr. Cr. N Dr. Cr. O Dr. Dr. Dr. Cr. P Dr. Cr. Q Dr. Cr. S Dr. Cr. T Dr. Cr. djusting Entries D E F G H Company Info Chart of Accounts Transactions ournal Entries T-Accounts Adjusted Trial Balance Journ Adjusting Entries AJE 1 Dr. Cr. AJE 2 Dr. Cr. AJE 3 Dr. Cr. AJE 4 Dr. Cr. AJE 5 Dr. Cr. AJE 6 Dr. Cr. Check figures: Total debits should equal total credits. Difference Company Info Chart of Accounts Transactions ournal Entries T-Accounts Adjusted Trial Balance Journal Entries - Closi A B D E F G H Instructions: The beginning account balances have been filled in for you. Post only the transactions and adjusting entries, not the closing entries, in this tab. DO NOT delete any cells in this tab. 100 - Cash 1/1/2018 120 - Inventory 1/1/2018 12,345,000 General Ledger - 33,000,000 110 Accounts Receivable 33,000,000 115- Allowance For Bad Debts 1,240,000 1/1/2018 1,240,000 130 Notes Receivable 135 Accumulated Depreciation 72,422,000 1/1/2018 Company Info Chart of Accounts Transactions Journal Entries T-Accounts Adjusted Trial Balance Journal Entries Closing , 120-Inventory 130- Notes Receivable 135 Accumulated Depreciation 72,422,000 1/1/2018 1/1/2018 12,345,000 1/1/2018 12,345,000 140 Equipment 160 - Buildings 170 - Land 1,000,000 2,567,000 1,000,000 180 Patents 185 Accumulated Amortization 7 1/1/2018 80,000 50,000 ###### 9 1 2 80,000 50,000 2,567,000 72,422,000 190 Interest Receivable 3 4 195 Prepaid Insurance Expense 200- Accounts Payable 205 - Unearned Rent Revenue 5 1/1/2018 70,050,000 1/1/2018 Company Info Transactions Chart of Accounts Journal Entries T-Accounts Adjusted Trial Balance Journal Entries - Closin eady 195 Prepaid Insurance Expense 200 Accounts Payable 205 Unearned Rent Revenue 1/1/2018 70,050,000 1/1/2018 70,050,000 300-Common Stock 310-APIC 340 - Retained Earnings 120,000,000 267,000,000 73,230,000 1/1/2018 120,000,000 267,000,000 73,230,000 2 400- Sales Revenue 410 Interest Revenue 405 Rent Revenue ###### 4 5 6 7 8 0 1 600-Dividends 415-Loss on Sale of Equipment 500-Cost of Goods Sold 2 1/1/2018 11 Company Info Chart of Accounts Transactions Journal Entries T-Accounts Adjusted Trial Balance Journal Entries - Closing 110 XV fx A B E F H 600 Dividends 415-Loss on Sale of Equipment ##### 1/1/2018 K 500-Cost of Goods Sold B 4 5 16 7 8 19 510 Depreciation Expense 518 Amortization Expense 520-Bad Debt Expense 90 1/1/2018 ####### 91 92 93 94 95 96 97 98 99 560 Insurance Expense 599- Income Tax Expense 540-Salaries & Wage Expense 100 1/1/2018 101 102 103 104 105 106 107 108 109 110 1.11 Company Info Transactions Chart of Accounts Journal Entries T-Accounts Adjusted Trial Balance Journal Entries Closin Instructions: Prepare the closing journal entries for Pane Company. Once you have recorded the journal entries, post them to the "T-Accounts-Closing" tab. C1 Dr. Dr. Dr. Cr. Cr. Cr. Cr. Cr. Cr. Cr. Cr. Cr. C2 Dr. Cr. Journal Entries Account Name To close the income statement accounts To close the Dividends account Check figures: Total debits should equal total credits. DR CR Remember sho Difference Transactions Journal Entries T-Accounts Adjusted Trial Balance Journal Entries - Closing -Accounts-Closing Post adv 1 2 3 4 Instructions: The balances in your "T-Accounts" tab have been automatically brought into your closing T-Accounts. Post the closing journal entries in your T-Accounts here to close your temporary accounts to zero and to calculate the ending balance in 5 6 340-Retained Earnings General Ledger 400 Sales Revenue 410 Interest Revenue 7 73,230,000 8 9 10 11 73,230,000 12 13 405 Rent Revenue 14 15 16 17 18 19 20 415-Loss on Sale of Equipment 500 Cost of Goods Sold 510 Depreciation Expense 21 22 23 24 25 26 27 28 518 Amortization Expense 520-Bad Debt Expense 540-Salaries Expense 29 30 21 Transactions Journal Entries T-Accounts Adjusted Trial Balance Journal Entries - Closing T-Accounts- Closing Ready A B C D E H K M 73,230,000 405 Rent Revenue 415 - Loss on Sale of Equipment 500-Cost of Goods Sold 510-Depreciation Expense 518 Amortization Expense 520 Bad Debt Expense 540 Salaries Expense 2 560-Insurance Expense 599- Income Tax Expense 600 Dividends . 7 B 9 0 Transactions Journal Entries T-Accounts Adjusted Trial Balance Journal Entries - Closing T-Accounts- Closing A B D E F G H 1 2 Note: Be sure to fill in all of the yellow cells for the financial statements. Use the amounts in the adjusted trial balance to create your income statement. The order of the accounts within 3 each section does not matter. 4 5 6 7 8 Sales Revenue 9 10 Cost of Goods Sold Gross Profit 11 Operating Expenses Pane in the Glass Company Income Statement For Year Ended December 31, 2018 12 13 14 15 16 17 Total Operating Expenses 18 Operating Income 19 Other Items 20 21 22 23 Income Before Tax 24 25 Net Income 26 27 28 22 Ready ... Transactions Journal Entries T-Accounts Adjusted Trial Balance Journal Entries Clo A B C D E 1 2 3 4 5 Current Assets 6 7 8 9 10 11 12 13 Less: Allowance for Bad Debts Total Current Assets 14 Property and Equipment 15 16 17 18 19 Less: Accumulated Depreciation Total Property and Equipment H J K G Pane in the Glass Company Balance Sheet December 31, 2018 Assets 21 22 23 20 Intangible Assets Less: Accumulated Amortization Total Intangible Assets 24 25 26 TOTAL ASSETS 27 Transactions Journal Entries T-Accounts Adjusted Trial Balance Journal Entries Ready F15 X fx AB C D E H K 24 222 25 26 27 28 TOTAL ASSETS 29 Current Liabilities 30 31 32 Total Current Liabilities 33 34 Total Liabilities 35 36 37 38 Contributed Capital 39 40 41 Total Contributed Capital 42 43 Retained Earnings 44 45 46 47 48 49 Total Stockholder's Equity Liabilities Stockholder's Equity TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY Ready Transactions Journal Entries T-Accounts Adjusted Trial Balance Journal Entries - Closing