Question
ACCOUNTSDEBITCREDITCASH6,868SHORTTERMFV-NIINVESTMENTS10,300ACCOUNTSRECEIVABLE425,905ALLOWANCEFORDOUBTFULACCOUNTS3,450INVENTORY422,812NOTESRECEIVABLE8,000OFFICEBUILDING500,000ACCUMULATEDDEPRECIATION(OFFICEBUILDING)280,000OFFICEEQUIPMENT120,000ACCUMULATEDDEPRECIATION(OFFICEEQUIPMENT)0LAND52,000ACCOUNTSPAYABLE298,757DIVIDENDSPAYABLE7,328NOTESPAYABLE,DUEIN202260,000PREFERREDSTOCK,30,000OUTSTANDINGONDECEMBER31,2019120,000COMMONSTOCK,100,000numberofsharesoutstandingONDEC31,2019200,000RETAINEDEARNINGS269,423SALESREVENUE3,471,148SALESDISCOUNTS10,571SALESRETURNSANDALLOWANCES51,359PURCHASES2,600,824PURCHASESDISCOUNTS46,778TRANSPORTATION-IN25,235SHIPPINGEXPENSE15,000SALARIESEXPENSE271,599EMPLOYEEPENSIONEXPENSE32,580RENTEXPENSE40,955INSURANCEEXPENSE16,456SUPPLIESEXPENSE25,673GAINONSALEOFASSETSOFDISCONTINUEDACTIVITY3,650ADVERTISINGEXPENSE18,860WARRANTYEXPENSE15,000OPERATINGLOSSONDISCONTINUEDOPERATIONS12,225TELEPHONEEXPENSE28,580CASHDIVIDENDSDECLARED-PREFERRED37,568CASHDIVIDENDSDECLARED-COMMON12,164TOTAL4,760,5344,760,534NOTE:Allrevenue,expensefigures(IncomeStatementaccounts)andtheErrorcorrection(RetainedEarningsaccount)abovearebeforetax.AssumethiscompanyisfollowingASPEADDITIONALINFORMATION:1.Assumethatthetaxratewas30%.AllaccountsontheTrialBalancearebeforetax.2.In2019commonstockwasissuedasfollows:onMay1:15,000commonshareswereissuedandonSeptember1:35,000commonshareswereissued.Theamountofcommonstockoutstandingattheendoftheyear(Dec31,2019)is100,0003.Itwasdiscoveredthatanerroroccurredin2018relatingtoDepreciationExpense.TheDepreciationExpensewasunderstatedin2018by$15,200beforetaxes.NOTE:ThisentryhasnotbeenreflectedintheaboveTrialBalance.Anadjustmentisneeded.4.ThecompanyperformedayearendphysicalcountofitsinventoryasatDecember31,2019.TheamountofinventoryonhandatDecember31,2019amountedto$425,700InventoryismaintainedonaPERIODICbasis.ThereforetheInventorybalanceonTrialBalanceistheopeningbalance.NOTE:ThisentryhasnotbeenreflectedintheaboveTrialBalance.Anadjustmentisneeded.
ACCOUNTSDEBITCREDITCASH6,868SHORTTERMFV-NIINVESTMENTS10,300ACCOUNTSRECEIVABLE425,905ALLOWANCEFORDOUBTFULACCOUNTS3,450INVENTORY422,812NOTESRECEIVABLE8,000OFFICEBUILDING500,000ACCUMULATEDDEPRECIATION(OFFICEBUILDING)280,000OFFICEEQUIPMENT120,000ACCUMULATEDDEPRECIATION(OFFICEEQUIPMENT)0LAND52,000ACCOUNTSPAYABLE298,757DIVIDENDSPAYABLE7,328NOTESPAYABLE,DUEIN202260,000PREFERREDSTOCK,30,000OUTSTANDINGONDECEMBER31,2019120,000COMMONSTOCK,100,000numberofsharesoutstandingONDEC31,2019200,000RETAINEDEARNINGS269,423SALESREVENUE3,471,148SALESDISCOUNTS10,571SALESRETURNSANDALLOWANCES51,359PURCHASES2,600,824PURCHASESDISCOUNTS46,778TRANSPORTATION-IN25,235SHIPPINGEXPENSE15,000SALARIESEXPENSE271,599EMPLOYEEPENSIONEXPENSE32,580RENTEXPENSE40,955INSURANCEEXPENSE16,456SUPPLIESEXPENSE25,673GAINONSALEOFASSETSOFDISCONTINUEDACTIVITY3,650ADVERTISINGEXPENSE18,860WARRANTYEXPENSE15,000OPERATINGLOSSONDISCONTINUEDOPERATIONS12,225TELEPHONEEXPENSE28,580CASHDIVIDENDSDECLARED-PREFERRED37,568CASHDIVIDENDSDECLARED-COMMON12,164TOTAL4,760,5344,760,534NOTE:Allrevenue,expensefigures(IncomeStatementaccounts)andtheErrorcorrection(RetainedEarningsaccount)abovearebeforetax.AssumethiscompanyisfollowingASPEADDITIONALINFORMATION:1.Assumethatthetaxratewas30%.AllaccountsontheTrialBalancearebeforetax.2.In2019commonstockwasissuedasfollows:onMay1:15,000commonshareswereissuedandonSeptember1:35,000commonshareswereissued.Theamountofcommonstockoutstandingattheendoftheyear(Dec31,2019)is100,0003.Itwasdiscoveredthatanerroroccurredin2018relatingtoDepreciationExpense.TheDepreciationExpensewasunderstatedin2018by$15,200beforetaxes.NOTE:ThisentryhasnotbeenreflectedintheaboveTrialBalance.Anadjustmentisneeded.4.ThecompanyperformedayearendphysicalcountofitsinventoryasatDecember31,2019.TheamountofinventoryonhandatDecember31,2019amountedto$425,700InventoryismaintainedonaPERIODICbasis.ThereforetheInventorybalanceonTrialBalanceistheopeningbalance.NOTE:ThisentryhasnotbeenreflectedintheaboveTrialBalance.Anadjustmentisneeded.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
