ACC 302 - Current Liabilities Case -40 points Smyth Corporation had the following balances at 12/31/x1: $2,200,000 CASH 3,750,000 INVESTMENTS-TRADING 2,600,000 ACCOUNTS RECEIVABLE (NET) 5,450,000 INVENTORIES PROPERTY, PLANT, & EQUIP (NET) 4,510,000 90,000 ACCOUNTS PAYABLE 7,000 INTEREST PAYABLE 21,000 ACCRUED VACATION PAY LIABILITY FOR PRODUCT WARRANTIES NOTES PAYABLE (long term) BONDS PAYABLE COMMON STOCK 2,000 COMMON STOCK DIVIDENDS DISTRIBUTABLE 370,000 19,000,000 RETAINED EARNINGS (1/1/x1) SALES 10,900,000 COST OF GOODS SOLD 23,000 VACATION PAY EXPENSE 883,762 SALES TAX EXPENSE 245,000 WARRANTY EXPENSE 3,548,238 1,900,000 OTHER OPERATING EXPENSES INTEREST EXPENSE Additional information. No adjustments have been made for any of the additional information. No reversing entries were made at 1/1/x1. (Hints!!! Do not change "Cash".) Financial statements are not issued until March of x2.) a. Smyth has a policy that allows employees 10 vacation days annually. The vacation days vest after an employee has been employed for six months. Smyth has a workforce of 25 employees each of whom has been with the company for at least three years. The average weekly salary is $1,000 (assume a five day work week). During the year employees took vacation hours totaling 115 days. The bookkeeper debited Vacation Expense when the employees were paid for the vacation days taken. (Ignore payroll taxes) b. Sales include state sales tax at 5%. The bookkeeper debits Sales Tax Expense when sales taxes are paid to the state. At year end, sales tax of $21,000 is due to the state. Sales Tax Payable at 1/1/x1 was zero. Warranty costs are estimated at 1.6% of the selling price. Actual warranty costs incurred during the year totaled $245,000. The bookkeeper debits Warranty Expense as these costs are incurred. C. The corporate tax rate is 40%. The company president receives a bonus based upon 10% of income before bonus and tax. e. f. $1,000,000 of the bonds mature 6/30/x2. The minutes of the last board meeting state that the company plans to refinance the bonds on a long-term basis when they mature. You have determined that the company has no commitments from any lender to take care of these bonds. $1,000,000 of the bonds matured 1/31/x2. They were extinguished by issuing common stock. (Today's date g. is 2/1/x2). h. Smyth issued a 2 year, $90,000, noninterest bearing note on 12/31/x1 for the purchase of a machine. The market rate of interest is 10%. No entry has been made for this purchase. i. Cash dividends of $15,000 were declared on 12/15/x1 to be paid to stockholders of record on 1/15/x2 to be paid 1/31/x2. The company is suing a competitor for patent infringement. The attorneys believe that Smyth will win the law suit. The settlement may be for as much as $90,000. The attorneys believe Smyth will probably receive $45,000. k. The company is being sued by a customer who was hurt while visiting the corporate office. The attorneys believe that Smith may lose as much as $100,000, but that the customer will probably settle for $35,000. Required: Prepare a balance sheet and income statement for Smyth Company. Show calculations, as well as adjusting entries, related to the above additional information.

ACC 392 - Current Liabilities Case -40 points Smyth Corpoi Additional information. No adjustments have been made for any of the additional information. No seversing eraries were made at 1/1/1. (Hints!l! Do pet change "Cach".) Financial statements afe not issued until March of 2.) a. Smyth has a policy that allows employees 10 vacation days annually. The vacation diys vest after an employee has been employed for six months. Smyth has a workforce of 25 employees cach of whom hes been with the company for at least three years. The average weckly salary is $1,000 (assume a five day woik. week). During the year employees took vacation bours totaling 115 days. The bookkeeper debited Vacation Expense when the employees were paid for the vacation days taken. (Ignore payroll taxes) Sales include state sales tax at 5%. The bookkeeper debits Sales Tax Expense when sales taxes are pudd to b. the state. At year end, sales tax of \$21,000 is due to the state. Sales Tax Payable at 1A/xi was zero. Warranty costs are estimated at 1.6% of the selling price. Actual warranty costs incurred during the year d. The corporate tax rate is 40%. The company president receives a bonus based upon 10% of income before bonus and tax. f. $1,000,000 of the bonds mature 6/30/2. The minutes of the last board meeting state that the company plans to refinance the bonds on a long-term basis when they mature. You have determined that the company has no commitments from any lender to take care of these bonds. g. $1,000,000 of the bonds matured 1/31/2. They were extinguished by issuing common stock. (Today's date is 2/1/2). Smyth issued a 2 year, $90,000, noninterest bearing note on 12/31/x1 for the purchase of a machine. The market rate of interest is 10%. No entry has been made for this purchase. market rate of interest ividends of $15,000 were declared on 12/15/1 to be paid to stocktholders of record on 1/15/2 to be i. paid 1/31/2. paid I/3i/x2. law suit. The settlement may be for as much as $90,000. The attomeys believe Smyth will probebly receive $45,000. The company is being sued by a customer who was hurt while visiting the corporate office. The antorneys believe that Smith may lose as much as $100,000, but that the customer will probably settle for $35,000. Required: Prepare a balance sheet and income statement for Smyth Company. Show calculations, as well as adjusting entries, related to the above additional information