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Amounts due from customers totaled $171,000 at 12/31/202 During the year the company wrote off $7,400 of receivables that were deemed to be uncollectible. An
- Amounts due from customers totaled $171,000 at 12/31/202 During the year the company wrote off $7,400 of receivables that were deemed to be uncollectible. An analysis of the receivables revealed that specific accounts totaling $12,400 were deemed to be uncollectible and an estimated 3% of the remaining accounts receivable balance will probably not be collected in 2022. There were no uncollectable receivables estimated at 12/31/2020.
- On May 1, 2021, Stafford paid $14,400 to renew its comprehensive insurance coverage for one year. The premium on the previous one-year policy, which expired on April 30, 2021, was $13,200. No adjustment was made in the prior year, Stafford had never heard of a prepaid.
- Stafford is being sued for $100,000. Stafford's attorney believes that an unfavorable outcome is probable and that a reasonable settlement is $65,000.
- All employees are paid weekly on Friday. The average payroll is $3,300 (6-day work week) per week. Employees were last paid on Friday, December 31st, 2021 for the week ended December 25th. Although the employees did not work on Christmas Day, Stafford pays them for the day.
- Stafford has made estimated tax payments of $10,000 per quarter for the first three quarters of 2021. Staffords estimated tax rate is 21%.
- Stafford took out a 2 year note payable on April 1, 2021. The note bears interest at 4%. Principal and interest are due at maturity.
- The company depreciates their Furniture & Fixtures over a useful life of 10 years using the straight-line method, with no salvage value.
- The investments account is comprised of two investments. One $100,000 bond was purchased at face value and Staffords intends to hold until it matures. The interest on these bonds are 3% and is paid annually on January 31. Stafford purchased these bonds on September 1st of the current year. The fair value of these bonds are $102,000. The other investment are shares of Google stock, which were purchased on 4/3/21 for $2,410/share. The closing price of Google on 12/31/21, was $2,894/share.
Stafford Flowers Inc. | |||||
Trial Balance (Unadjusted) | |||||
31-Dec-21 | |||||
Dr. | Cr. | ||||
Cash | $25,600 | ||||
Accounts receivable | 116,200 | ||||
Inventory | 62,000 | ||||
Investments, at cost | 220,500 | ||||
Furniture and Fixtures | 263,200 | ||||
Accumulated depreciation | $102,400 | ||||
Accounts payable | 17,000 | ||||
Capital stock, $10 par value | 50,000 | ||||
Retained earnings | 137,000 | ||||
Sales | 884,200 | ||||
Notes payable, due 3/31/23 | 200,000 | ||||
Cost of Goods Sold | 405,100 | ||||
Salaries expense | 174,000 | ||||
Payroll Taxes | 12,400 | ||||
Income tax expense | 30,000 | ||||
Insurance expense | 14,400 | ||||
Bad Debt expense | 7,400 | ||||
Rent expense | 34,200 | ||||
Utilities expense | 12,600 | ||||
Travel and entertainment expense | 13,000 | ||||
TOTALS | $1,390,600 | $1,390,600 |
Required: .
a. Prepare accrual basis financial statements for 2021 to be presented to the bank. You should include a multiple step income statement, statement of retained earnings and a classified balance sheet. A statement of cash flow is not required.
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