A comprehensive problem that involves the accounting cycle from start to finish.

1 The Beginning Balances at the start of 2021 for Milano San Remo (MSR) Corp. 2 are as follows: 3 Debit Credit 4 Cash 145,000 5 Accounts Receivable 42,000 6 Allowance for Doubtful Accounts 4,600 7 Supplies 250 8 Inventory (48 units at $300 apiece) 14,400 9 Equipment 9,000 10 Van 25,000 11 Building 125,000 12 Accumulated Depreciation 30,000 13 Land 25,000 14 Sales Tax Payable 390 15 Employee Income Tax Payable 1,000 16 FICA -- Social Security Payable 840 17 FICA -- Medicare Payable 210 18 Warranty Payable 948 19 Notes Payable -- Building 92,762 20 Bonds Payable 50,000 21 Discount on Bonds Payable 800 22 Common Stock, $5 par value 50,000 23 Retained Earnings 155.700 24 Total 386,450 386,450 25 26 27 Place the transactions in a general journal below: 28 No. Account Title Debit Credit 29 Milano San Remo (MSR) had the following transactions for the 2021 year: 1. Paid sales tax payable from the prior year. 2. Issued 5,000 additional shares of its $5 par value common stock for $8 per share, and also issued 1,000 shares of $50 par value, 5% cumulative preferred stock for $52 per share. 3. Purchased $500 of supplies on account. 4. Purchased merchandise on account: 700 units at a cost of $300 each. 5. Wrote off $3,670 of uncollectible accounts receivable. 6. Sold 720 items of merchandise for $600 each plus sales tax of 5%. The sales were on account. Cost of goods sold was $300 for each item. 7. Paid the sales tax collected on $100,000 of merchandise sales. 8. Collected $198,000 of accounts receivable during the year. 9. Paid employee salaries of $96,000 for the year. Social Security rate is 6% and Medicare rate is 1.5%; total federal income tax withheld was $10,600. Net salaries were paid in cash. 10. Declared a dividend on the preferred stock and also a $1 per share dividend on the common stock. 11. Paid $850 in warranty repairs during the year. 12. Paid the dividends that had been previously declared. 13. Paid $18,500 in advertising expenses during the year. 14. Paid $6,100 in utilities expense during the year. 15. Paid $150,000 on accounts payable. 16. Paid bond interest and amortized the discount. Discount amortization is $200 a year and the interest rate is 6%. 17. Paid on the notes payable - it is an installment note with an annual payment of $14,238. Interest rate is 7% on the note. Adjustments: 18. There was a total of $190 in supplies on hand at the end of the year. 19. Uncollectible accounts expense is recorded using the allowance method and estimating 1% of sales on account to be uncollectible. 20. Warranty expense is estimated to be 2% of sales. 30 31 32 33 34 35 Prepare a Trial Balance based on beginning balances plus the result of the transactions recorded in the general journal: MSR Trial Balance at 12/31/21 Account Debit Credit Cash Accounts Receivable Allowance for Doubtful Accounts Supplies Inventory Equipment Van Building Accumulated Depreciation Land Accounts Payable Sales Tax Payable Employee Income Tax Payable 36 37 38 39 40 41 42 43 1 The Beginning Balances at the start of 2021 for Milano San Remo (MSR) Corp. 2 are as follows: 3 Debit Credit 4 Cash 145,000 5 Accounts Receivable 42,000 6 Allowance for Doubtful Accounts 4,600 7 Supplies 250 8 Inventory (48 units at $300 apiece) 14,400 9 Equipment 9,000 10 Van 25,000 11 Building 125,000 12 Accumulated Depreciation 30,000 13 Land 25,000 14 Sales Tax Payable 390 15 Employee Income Tax Payable 1,000 16 FICA -- Social Security Payable 840 17 FICA -- Medicare Payable 210 18 Warranty Payable 948 19 Notes Payable -- Building 92,762 20 Bonds Payable 50,000 21 Discount on Bonds Payable 800 22 Common Stock, $5 par value 50,000 23 Retained Earnings 155.700 24 Total 386,450 386,450 25 26 27 Place the transactions in a general journal below: 28 No. Account Title Debit Credit 29 Milano San Remo (MSR) had the following transactions for the 2021 year: 1. Paid sales tax payable from the prior year. 2. Issued 5,000 additional shares of its $5 par value common stock for $8 per share, and also issued 1,000 shares of $50 par value, 5% cumulative preferred stock for $52 per share. 3. Purchased $500 of supplies on account. 4. Purchased merchandise on account: 700 units at a cost of $300 each. 5. Wrote off $3,670 of uncollectible accounts receivable. 6. Sold 720 items of merchandise for $600 each plus sales tax of 5%. The sales were on account. Cost of goods sold was $300 for each item. 7. Paid the sales tax collected on $100,000 of merchandise sales. 8. Collected $198,000 of accounts receivable during the year. 9. Paid employee salaries of $96,000 for the year. Social Security rate is 6% and Medicare rate is 1.5%; total federal income tax withheld was $10,600. Net salaries were paid in cash. 10. Declared a dividend on the preferred stock and also a $1 per share dividend on the common stock. 11. Paid $850 in warranty repairs during the year. 12. Paid the dividends that had been previously declared. 13. Paid $18,500 in advertising expenses during the year. 14. Paid $6,100 in utilities expense during the year. 15. Paid $150,000 on accounts payable. 16. Paid bond interest and amortized the discount. Discount amortization is $200 a year and the interest rate is 6%. 17. Paid on the notes payable - it is an installment note with an annual payment of $14,238. Interest rate is 7% on the note. Adjustments: 18. There was a total of $190 in supplies on hand at the end of the year. 19. Uncollectible accounts expense is recorded using the allowance method and estimating 1% of sales on account to be uncollectible. 20. Warranty expense is estimated to be 2% of sales. 30 31 32 33 34 35 Prepare a Trial Balance based on beginning balances plus the result of the transactions recorded in the general journal: MSR Trial Balance at 12/31/21 Account Debit Credit Cash Accounts Receivable Allowance for Doubtful Accounts Supplies Inventory Equipment Van Building Accumulated Depreciation Land Accounts Payable Sales Tax Payable Employee Income Tax Payable 36 37 38 39 40 41 42 43