Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Beautiful by design, INc. is a full-service Nursery/landscaping company offering design services, plants, shrubs, and trees, and installation . Below is a listing of all

Beautiful by design, INc. is a full-service Nursery/landscaping company offering design services, plants, shrubs, and trees, and installation . Below is a listing of all accounts and balances as of december 1.

Account Names

Amount

Cash

7,500,000

Accounts Receivable

2,800,000

Allowance for Doubtful Accounts (credit balance)

(50,000)

Inventory

3,000,000

Prepaid Supplies

293,750

Assets Held-for-Sale

1,500,000

Land

12,500,000

Buildings

6,975,000

Accumulated Depreciation-Buildings

(1,743,750)

Equipment

9,300,000

Accumulated Depreciation-Equipment

(4,650,000)

Accounts Payable

1,400,000

Interest Payable

100,000

Unearned Design Revenue

800,000

Bonds Payable

5,000,000

Common Stock ($10 par)

10,000,000

Retained Earnings

13,837,500

Sales Revenue

14,250,000

Design Revenue

3,950,000

Cost of Goods Sold

4,562,500

Sales Commissions

2,000,000

Advertising Expense

750,000

Rent Expense

1,000,000

Wages Expense

2,500,000

Supplies Expense

500,000

Interest Expense

200,000

Loss on Income from Discontinued Operations

400,000

Journalize the following year end adjusting entries. Record the journal entries using proper formatting. *Update all account balances based on the journal entries prepared in the previous section prior to starting this section of the problem.

The buildings have been depreciated for 5 years using straight line over a 20 year life with zero salvage value. The equipment has been depreciated for 5 years using straight line over a 10 year life with zero salvage value. Record depreciation expense for the buildings and equipment. Do not depreciate the new equipment and building purchased on December 20 because they were purchased after the 15th of the month.

Record the amount of fire insurance that has not yet expired.

Record the accrual of interest earned during the month. Based on 360 days in the year.

Record the accrual of interest expense incurred during the month. Based on 360 days in the year.

Record the accrual of employee wages in the amount of $1,500,000 to be paid on January 7 of the following year.

As of December 31, $700,000 in unearned design revenue has been earned.

At year end, the controller ages the accounts receivable to determine the dollar value of the accounts that will not be collected. Based on analysis of the receivables, the controller calculated that $60,000 in accounts receivable would not be collected.

At year end, supplies on hand amounted to $93,000.

Paid dividends of $1 per share to common stockholders. Take the dividend directly from retained earnings.

Update account balances prior to starting the next section of the problem.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

ISO 9000 Family Of Standards With Extracts From ISO 9001 Audit Trail

Authors: David John Seear

1st Edition

1477226400, 978-1477226407

More Books

Students also viewed these Accounting questions