Aberkonkie Corporation Post-Closing Trial Balance December 31, 2021 Credit Debit S 24,300 22.400 Cash Accounts Receivable Allowance for Doubtful Accounts Equipment Accumulated Depreciation-Equipment Buildings Accumulated Depreciation-Buildings S 1,200 20,000 15,000 100,000 15,000 20,000 Land 12,370 90,000 53,130 Accounts Payable Common Stock Retained Earnings $186,700 $186,700 During the first quarter of 2022, the following transaction occurred: 1. On February 1, Aberkonkie collected fees of $12,000 in advance. The company will perform $1,000 of services each month from February 1, 2022, to January 31, 2023. 2. On February 1, Aberkonkie purchased computer equipment for $9,000 plus sales taxes of $600. $3,000 cash was paid with the rest on account. Check #455 was used 3. On March 1, Aberkonkie acquired a patent with a 10-year life for $9,600 cash. Check #456 was used. 4. On March 28, Aberkonkie recorded the quarter's sales in a single entry. During this period, Aberkonkie had total sales of $140,000 (not including the sales referred to in item 1 above). All the sales were on account. 5. On March 29, Aberkonkie collected $133,000 from customers on account. 6. On March 29, Aberkonkie paid $16,370 on accounts payable. Check #457 was used. 7. On March 29, Aberkonkie paid other operating expenses of $97,525. Check #458 was used. 8. On March 31, Aberkonkie wrote off a receivable of $200 for a customer who declared bankruptcy 9. On March 31, Aberkonkie sold for $1,620 equipment that originally cost $11,000. It had an estimated life of 5 years and salvage of $1,000. Accumulated depreciation as of December 31, 2021, was $8,000 using the straight line method. (Hint: Record depreciation on the equipment sold, then record the sale.) Bank reconciliation data and adjustment data: 1. The company reconciles its bank statement every quarter. Information from the December 31, 2021, bank reconciliation is: Deposit in transit: Outstanding checks 12/30/2021 $5,000 #440 3,444 #452 333 #453 865 8454 5,845 The bank statement received for the quarter ended March 31, 2022, is as follows: $ 29,787 Beginning balance per bank Deposits: 1/2/2022, $5,000; 2/2/2022, $12,000; 3/30/2022, $133,000 Checks: #452, $333; #453, $865; # 457, $16,370; # 458, $97,525 Debit memo: Bank service charge (record as operating expense) Ending bank balance 150,000 (115,093) (100) s 64,594 2. Record revenue earned from item 1 above. 3. $26,000 of accounts receivable at March 31, 2022, are not past due yet. The bad debt percentage for these is 4%. The remaining balance of accounts receivable is past due. The bad debt percentage for these is 23.75%. Record bad debt expense. (Hint: You will need to compute the balance in accounts receivable before calculating this.) 4. Depreciation is recorded on the equipment still owned at March 31, 2022. The new equipment pur- chased in February is being depreciated on a straight-line basis over 5 years and salvage value was estimated at $1,200. The old equipment still owned is being depreciated over a 10-year life using straight-line with no salvage value. Debit Credit S 20,000 150,000 Land Buildings Equipment Patent 60,000 9,000 Allowance for Doubtful Accounts Accumulated Depreciation-Buildings Accumulated Depreciation-Equipment Accounts Payable Salaries and Wages Payable Notes Payable (due April 30, 2023) Income Taxes Payable Interest Payable Notes Payable (due in 2028) 500 50,000 24,000 27,300 -0- 11,000 -0- -0- 35,000 50,000 63,600 Common Stock Retained Earnings Dividends Sales Revenue 12,000 900,000 Interest Revenue -0- Gain on Disposal of Plant Assets Bad Debt Expense Cost of Goods Sold -0- -0- 630,000 Depreciation Expense Income Tax Expense Insurance Expense Interest Expense Other Operating Expenses Amortization Expense Salaries and Wages Expense -0- -0- -0- -0- 61,800 -0- 110,000 $1,161,400 $1,161,400 e following transactions occurred during December. Purchased equipment for $16,000, plus sales taxes of $800 (paid in cash). Milo sold for $3,500 equipment which originally cost $5,000. Accumulated depreciation on this equipment at January 1, 2022, was $1,800, 2022 depreciation prior to the sale of equipment was $825. Milo sold for $5,000 on account inventory that cost $3,500 Salaries and wages of $6,600 were paid. Dec. 2 2 15 23 justment data: . Milo estimates that uncollectible accounts receivable at year-end are $4,000 2. The note receivable is a 1-year, 8% note dated April 1, 2022. No interest has been recorded 3. The balance in prepaid insurance represents payment of a $3,600, 6-month premium on September 1 2022 4. The building is being depreciated using the straight-line method over 30 years. The salvage value is $30,000. 5. The equipment owned prior to this year is being depreciated using the straight-line method over 5 years. The salvage value is 10% of cost. 6. The equipment purchased on December 2, 2022, is being depreciated using the straight-line method over 5 years, with a salvage value of $1,800 7. The patent was acquired on January 1, 2022, and has a useful life of 9 years from that date. 8. Unpaid salaries at December 31, 2022, total $2,200. 9. Both the short-term and long-term notes payable are dated January 1, 2022, and carry a 10% interest rate. All interest is payable in the next 12 months. 10. Income tax expense was $15,000. It was unpaid at December 31. nstructions a. Prepare journal entries for the transactions listed above and adjusting entries. b. Prepare an adjusted trial balance at December 31, 2022 e. Prepare a 2022 income statement and a 2022 retained earnings statement. b. Totals $1,205,775 $51.150 $247,850 C. Net income d. Total assets d. Prepare a December 31, 2022, balance sheet. Aberkonkie Corporation Post-Closing Trial Balance December 31, 2021 Credit Debit S 24,300 22.400 Cash Accounts Receivable Allowance for Doubtful Accounts Equipment Accumulated Depreciation-Equipment Buildings Accumulated Depreciation-Buildings S 1,200 20,000 15,000 100,000 15,000 20,000 Land 12,370 90,000 53,130 Accounts Payable Common Stock Retained Earnings $186,700 $186,700 During the first quarter of 2022, the following transaction occurred: 1. On February 1, Aberkonkie collected fees of $12,000 in advance. The company will perform $1,000 of services each month from February 1, 2022, to January 31, 2023. 2. On February 1, Aberkonkie purchased computer equipment for $9,000 plus sales taxes of $600. $3,000 cash was paid with the rest on account. Check #455 was used 3. On March 1, Aberkonkie acquired a patent with a 10-year life for $9,600 cash. Check #456 was used. 4. On March 28, Aberkonkie recorded the quarter's sales in a single entry. During this period, Aberkonkie had total sales of $140,000 (not including the sales referred to in item 1 above). All the sales were on account. 5. On March 29, Aberkonkie collected $133,000 from customers on account. 6. On March 29, Aberkonkie paid $16,370 on accounts payable. Check #457 was used. 7. On March 29, Aberkonkie paid other operating expenses of $97,525. Check #458 was used. 8. On March 31, Aberkonkie wrote off a receivable of $200 for a customer who declared bankruptcy 9. On March 31, Aberkonkie sold for $1,620 equipment that originally cost $11,000. It had an estimated life of 5 years and salvage of $1,000. Accumulated depreciation as of December 31, 2021, was $8,000 using the straight line method. (Hint: Record depreciation on the equipment sold, then record the sale.) Bank reconciliation data and adjustment data: 1. The company reconciles its bank statement every quarter. Information from the December 31, 2021, bank reconciliation is: Deposit in transit: Outstanding checks 12/30/2021 $5,000 #440 3,444 #452 333 #453 865 8454 5,845 The bank statement received for the quarter ended March 31, 2022, is as follows: $ 29,787 Beginning balance per bank Deposits: 1/2/2022, $5,000; 2/2/2022, $12,000; 3/30/2022, $133,000 Checks: #452, $333; #453, $865; # 457, $16,370; # 458, $97,525 Debit memo: Bank service charge (record as operating expense) Ending bank balance 150,000 (115,093) (100) s 64,594 2. Record revenue earned from item 1 above. 3. $26,000 of accounts receivable at March 31, 2022, are not past due yet. The bad debt percentage for these is 4%. The remaining balance of accounts receivable is past due. The bad debt percentage for these is 23.75%. Record bad debt expense. (Hint: You will need to compute the balance in accounts receivable before calculating this.) 4. Depreciation is recorded on the equipment still owned at March 31, 2022. The new equipment pur- chased in February is being depreciated on a straight-line basis over 5 years and salvage value was estimated at $1,200. The old equipment still owned is being depreciated over a 10-year life using straight-line with no salvage value. Debit Credit S 20,000 150,000 Land Buildings Equipment Patent 60,000 9,000 Allowance for Doubtful Accounts Accumulated Depreciation-Buildings Accumulated Depreciation-Equipment Accounts Payable Salaries and Wages Payable Notes Payable (due April 30, 2023) Income Taxes Payable Interest Payable Notes Payable (due in 2028) 500 50,000 24,000 27,300 -0- 11,000 -0- -0- 35,000 50,000 63,600 Common Stock Retained Earnings Dividends Sales Revenue 12,000 900,000 Interest Revenue -0- Gain on Disposal of Plant Assets Bad Debt Expense Cost of Goods Sold -0- -0- 630,000 Depreciation Expense Income Tax Expense Insurance Expense Interest Expense Other Operating Expenses Amortization Expense Salaries and Wages Expense -0- -0- -0- -0- 61,800 -0- 110,000 $1,161,400 $1,161,400 e following transactions occurred during December. Purchased equipment for $16,000, plus sales taxes of $800 (paid in cash). Milo sold for $3,500 equipment which originally cost $5,000. Accumulated depreciation on this equipment at January 1, 2022, was $1,800, 2022 depreciation prior to the sale of equipment was $825. Milo sold for $5,000 on account inventory that cost $3,500 Salaries and wages of $6,600 were paid. Dec. 2 2 15 23 justment data: . Milo estimates that uncollectible accounts receivable at year-end are $4,000 2. The note receivable is a 1-year, 8% note dated April 1, 2022. No interest has been recorded 3. The balance in prepaid insurance represents payment of a $3,600, 6-month premium on September 1 2022 4. The building is being depreciated using the straight-line method over 30 years. The salvage value is $30,000. 5. The equipment owned prior to this year is being depreciated using the straight-line method over 5 years. The salvage value is 10% of cost. 6. The equipment purchased on December 2, 2022, is being depreciated using the straight-line method over 5 years, with a salvage value of $1,800 7. The patent was acquired on January 1, 2022, and has a useful life of 9 years from that date. 8. Unpaid salaries at December 31, 2022, total $2,200. 9. Both the short-term and long-term notes payable are dated January 1, 2022, and carry a 10% interest rate. All interest is payable in the next 12 months. 10. Income tax expense was $15,000. It was unpaid at December 31. nstructions a. Prepare journal entries for the transactions listed above and adjusting entries. b. Prepare an adjusted trial balance at December 31, 2022 e. Prepare a 2022 income statement and a 2022 retained earnings statement. b. Totals $1,205,775 $51.150 $247,850 C. Net income d. Total assets d. Prepare a December 31, 2022, balance sheet