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Adjustment data: 1. Culver estimates that uncollectible accounts receivable at year-end are $7,040. 2. The note receivable is a one-year, 8% note dated April 1,
Adjustment data:
1. | Culver estimates that uncollectible accounts receivable at year-end are $7,040. | |
2. | The note receivable is a one-year, 8% note dated April 1, 2022. No interest has been recorded. | |
3. | The balance in prepaid insurance represents payment of a $6,336, 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 $52,800. | |
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 $3,168. | |
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 $3,872. | |
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 $26,400. It was unpaid at December 31. |
1. Prepare journal entries for the transactions listed above and adjusting entries.
2. Prepare an adjusted trial balance at December 31, 2022.
3. Prepare a 2022 income statement.
Culver Corporation's unadjusted trial balance at December 1, 2022, is presented below. Debit Credit Cash $38,720 Accounts Receivable 64,768 Notes Receivable 17,600 Interest Receivable Inventory 63,712 Prepaid Insurance 6,336 Land 35,200 Buildings 264,000 Equipment 105,600 Patent 15,840 Allowance for Doubtful Accounts $880 Accumulated Depreciation- Buildings 88,000 Accumulated Depreciation- Equipment 42,240 Accounts Payable 48,048 Salaries and Wages Payable 0 Notes Payable (due April 30, 2023) 19,360 Income Taxes Payable Interest Payable Notes Payable (due in 2028) 61,600 Common Stock 88,000 Retained Earnings 111,936 Dividends 21,120 Sales Revenue 1,584,000 Interest Revenue Gain on Disposal of Plant Assets Bad Debt Expense Cost of Goods Sold 1,108,800 Depreciation Expense Income Tax Expense Insurance Expense Interest Expense Other Operating Expenses 108,768 Amortization Expense Salaries and Wages Expense 193,600 Total $2,044,064 $2,044,064 The following transactions occurred during December, Dec. Purchased equipment for $28,160, plus sales taxes of $1,408 (paid in cash). 2 Culver sold for $6,160 equipment which originally cost $8,800. Accumulated depreciation on this equipment at January 1, 2022, was $3,168; 2022 depreciation prior to the sale of equipment was $1,452. 15 Culver sold for $8,800 on account inventory that cost $6,160. 23 Salaries and wages of $11,616 were paid. Culver Corporation's unadjusted trial balance at December 1, 2022, is presented below. Debit Credit Cash $38,720 Accounts Receivable 64,768 Notes Receivable 17,600 Interest Receivable Inventory 63,712 Prepaid Insurance 6,336 Land 35,200 Buildings 264,000 Equipment 105,600 Patent 15,840 Allowance for Doubtful Accounts $880 Accumulated Depreciation- Buildings 88,000 Accumulated Depreciation- Equipment 42,240 Accounts Payable 48,048 Salaries and Wages Payable 0 Notes Payable (due April 30, 2023) 19,360 Income Taxes Payable Interest Payable Notes Payable (due in 2028) 61,600 Common Stock 88,000 Retained Earnings 111,936 Dividends 21,120 Sales Revenue 1,584,000 Interest Revenue Gain on Disposal of Plant Assets Bad Debt Expense Cost of Goods Sold 1,108,800 Depreciation Expense Income Tax Expense Insurance Expense Interest Expense Other Operating Expenses 108,768 Amortization Expense Salaries and Wages Expense 193,600 Total $2,044,064 $2,044,064 The following transactions occurred during December, Dec. Purchased equipment for $28,160, plus sales taxes of $1,408 (paid in cash). 2 Culver sold for $6,160 equipment which originally cost $8,800. Accumulated depreciation on this equipment at January 1, 2022, was $3,168; 2022 depreciation prior to the sale of equipment was $1,452. 15 Culver sold for $8,800 on account inventory that cost $6,160. 23 Salaries and wages of $11,616 were paidStep by Step Solution
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