AIMES CORPORATION Balance Sheet December 31, 2016 1 2 3 4 5 6 Cash Inventory Prepaid Insurance Equipment 60,000 61,500 11,200 75,000 208,700 8 9 Total Assets 10 11 12 Accounts payable Interest payable Bonds payable Common stock Retained earnings - 14 15 16 17 18 27,500 5,000 100,000 50,000 26,200 208.700 Total abilities 19 During 2017, the following transactions occurred. Almes uses a perpetual inventory system 20 1.) Almes paid 55,000 interest on the bonds on January 1, 2017 21 2.) Almes purchased $482,200 of inventory on account 22 ) Ames sold for $960,000 cash Inventory which cost $265,000. Almes also collected $28,800 sales tax 234) Aimes paid $460,000 on accounts payable 24 5.) Aimes paid 55,000 interest on the bonds on July 1, 2017 25 6.) The prepaid insurance (511,200) expired on July 31. 26.7.) On August 1, Aimes paid $20,400 for insurance coverage from August 1, 2017, through July 31, 2018 27 8.) Almes paid $34,000 sales taxes to the state 28 9.) Paid other operating expenses, 5182,000. 29 10. Redeemed the bonds on December 31, 2017, by paying 596,000 plus $5,000 interest 30 11.) sued $180,000 of 8% bonds on December 31, 2017 at 103. The bonds pay interest every lune 30 and December 31 31 32 Adjustment data 33 L Recorded the insurance expired from item 7 Question T-accounts Journal Entries Ad Trail Balance Income Statement Retained Earnings Sumit Balance Sheet + 19 During 2017, the following transactions occurred. Almes uses a perpetual Inventory system 20 2) Almes paid $5,000 interest on the bonds on January 1, 2017 21 2.) Alimes purchased 5482,200 of inventory on account 22 2.) Almes sold for $950,000 cash inventory which cost $265,000. Almes also collected $28,800 sales tax 23 4.) Almes paid $450,000 on accounts payable 24 5.) Almes paid $5,000 interest on the bonds on July 1, 2017 25 6.) The prepaid Insurance ($11,200) expired on July 31. 26 7) On August 1, Almes paid $20,400 for insurance coverage from August 1, 2017, through July 31, 2018 27 8.) Almes paid $34,000 sales taxes to the state. 28 9. Puld other operating expenses, 5182,000 29 10) Redeemed the bonds on December 31, 2017, by paying 596,000 plus $5,000 interest 30 11. med $180,000 of 8 bonds on December 31, 2017 at 103. The bonds pay interest every lune 30 and December 31 32 Adjustment data 33 ) Recorded the insurance expired from item 34 2.) The equipment was acquired on Devember 31, 2016, and will be deprecated on a straint-line basis over 5 years with a 53,000 salvage value 15 the income tax rate is 10%. (Hit Prepare the income statement up to come before taxes and multiply by 30% to compute the amount) This needs to be incuded in your adjust trial balance 36 37 Watctions 38 1. Prepare Accounts to determine ending balances 19 2) Prepare al entries for the transactions listed above and adjusting entries 40 Prepare and trance December 31, 2017 414) Prepare an income statement and retained earningstatement for the yew ending Dober 31, 2017 and a dessed balance sheet as of December 31, 2017 42 41 44 40
