ABC Stores LTD Unadjusted Trial Balance 31 December 2019 Account Cash Accounts Receivable Allowance for Doubtful Accounts Prepaid Insurance Merchandise Inventory Equipment Accumulated Depreciation-Equipment Building Accumulated Depreciation - Building Land Mortgage Payable Accounts Payable Common Stock Retained Earnings (As of 1 Jan. 2019) Sales Sales Returns and Allowances Sales Discounts Cost of Goods Sold Salary & Wage Expense Utility Expense Supplies Expense Total $ Debit $ Credit 55,000 75,000 5,000 36,000 100,000 40,000 8,000 300,000 30,000 500,000 200,000 110,000 415.000 140,000 450,000 25,000 5,000 120,000 60,000 30,000 12,000 $ 1,358,000 $ 1,358,000 Transactions 1. ABC Stores LTD purchased merchandise on account from supplier D $40,000, terms 2/10, n/30 2. ABC Stores LTD sold merchandise on account $30,000, terms 1/10, n/30. The cost of the merchandise sold was $20,000. 3. ABC Stores LTD received collections in full, less discounts, from customers billed on sales of $30,000 on transaction 2. 4. ABC Stores LTD paid the supplier D in full, less discount. 5. Aging schedule for ABC Stores is presented below. Number of Days Past Due Not Yet Total Due 50,000 10,000 15,000 5,000 10,000 75,000 15,000 1-30 10,000 5,000 Customer X Y Z Total Estimated Percentage uncollectible Total Estimated Bad Debts 31-60 61-90 Over 90 25,000 5,000 5,000 10,000 5,000 25,000 15,000 15,000 4% 8% 10% 12% 60% ? ? ? At Dec. 31, 2019, unadjusted balance in Allowance for Doubtful Accounts is a credit of $5,000. 6. The equipment has no salvage value and a useful life of 10 years. The building has a useful life of 10 years with no salvage value. Both the equipment and building were purchased on January 1, 2018. There has been no adjustment to account for depreciation for the current year of 2019. ABC Stores LTD applies declining-balance method for the equipment and straight-line method for the building. 7. ABC Stores LTD issued an $200,000, 6%, 6-year mortgage note on December 31, 2018 with equal annual payments. Journalize the first installment payment occurred on December 31, 2019. 8. Prepaid insurance is a 1-year policy starting December 1, 2019. 9. Rent of $30,000 were unrecorded and unpaid as of 31 December, 2019. 10. Corporate tax rate is 20%. Calculate corporate tax provision expense. Required: a) Open ledger accounts and journalize the transactions. (50%) b) Prepare adjusted trial balance and multiple-step income statement for the period ended December 31, 2019. (10%) c) Prepare a classified statement of financial position as of December 31, 2019. (10%) List of accounts to be used Cash, Accounts Receivable, Allowance for Doubtful Accounts, Prepaid Insurance, Merchandise Inventory, Equipment, Accumulated Depreciation Equipment, Building, Accumulated Depreciation - Building, Land, Mortgage Payable, Accounts Payable, Accrued Expense, Corporate Tax Payable, Common Stock, Retained Earnings, Sales, Sales Returns and Allowances, Sales Discounts, Cost of Goods Sold, Salary & Wage Expense, Utility Expense, Supplies Expense, Bad Debt Expense, Depreciation Expense, Interest Expense, Insurance Expense, Rent Expense, Corporate Tax Expense ABC Stores LTD Unadjusted Trial Balance 31 December 2019 Account Cash Accounts Receivable Allowance for Doubtful Accounts Prepaid Insurance Merchandise Inventory Equipment Accumulated Depreciation-Equipment Building Accumulated Depreciation - Building Land Mortgage Payable Accounts Payable Common Stock Retained Earnings (As of 1 Jan. 2019) Sales Sales Returns and Allowances Sales Discounts Cost of Goods Sold Salary & Wage Expense Utility Expense Supplies Expense Total $ Debit $ Credit 55,000 75,000 5,000 36,000 100,000 40,000 8,000 300,000 30,000 500,000 200,000 110,000 415.000 140,000 450,000 25,000 5,000 120,000 60,000 30,000 12,000 $ 1,358,000 $ 1,358,000 Transactions 1. ABC Stores LTD purchased merchandise on account from supplier D $40,000, terms 2/10, n/30 2. ABC Stores LTD sold merchandise on account $30,000, terms 1/10, n/30. The cost of the merchandise sold was $20,000. 3. ABC Stores LTD received collections in full, less discounts, from customers billed on sales of $30,000 on transaction 2. 4. ABC Stores LTD paid the supplier D in full, less discount. 5. Aging schedule for ABC Stores is presented below. Number of Days Past Due Not Yet Total Due 50,000 10,000 15,000 5,000 10,000 75,000 15,000 1-30 10,000 5,000 Customer X Y Z Total Estimated Percentage uncollectible Total Estimated Bad Debts 31-60 61-90 Over 90 25,000 5,000 5,000 10,000 5,000 25,000 15,000 15,000 4% 8% 10% 12% 60% ? ? ? At Dec. 31, 2019, unadjusted balance in Allowance for Doubtful Accounts is a credit of $5,000. 6. The equipment has no salvage value and a useful life of 10 years. The building has a useful life of 10 years with no salvage value. Both the equipment and building were purchased on January 1, 2018. There has been no adjustment to account for depreciation for the current year of 2019. ABC Stores LTD applies declining-balance method for the equipment and straight-line method for the building. 7. ABC Stores LTD issued an $200,000, 6%, 6-year mortgage note on December 31, 2018 with equal annual payments. Journalize the first installment payment occurred on December 31, 2019. 8. Prepaid insurance is a 1-year policy starting December 1, 2019. 9. Rent of $30,000 were unrecorded and unpaid as of 31 December, 2019. 10. Corporate tax rate is 20%. Calculate corporate tax provision expense. Required: a) Open ledger accounts and journalize the transactions. (50%) b) Prepare adjusted trial balance and multiple-step income statement for the period ended December 31, 2019. (10%) c) Prepare a classified statement of financial position as of December 31, 2019. (10%) List of accounts to be used Cash, Accounts Receivable, Allowance for Doubtful Accounts, Prepaid Insurance, Merchandise Inventory, Equipment, Accumulated Depreciation Equipment, Building, Accumulated Depreciation - Building, Land, Mortgage Payable, Accounts Payable, Accrued Expense, Corporate Tax Payable, Common Stock, Retained Earnings, Sales, Sales Returns and Allowances, Sales Discounts, Cost of Goods Sold, Salary & Wage Expense, Utility Expense, Supplies Expense, Bad Debt Expense, Depreciation Expense, Interest Expense, Insurance Expense, Rent Expense, Corporate Tax Expense