Bob's Baseball Bats (BBB) is a fictional company. The following information includes the balance sheet as of December 31, 2017, and the details of the transactions that occurred during 2018. Background: Bob's Baseball Bats is a baseball bat retailer (in other words, BBB buys bats from a bat manufacturer in Louisville, Kentucky and then sells them in their stores). Transactions for 2018 are representative of such a company's business activities. HINT: Read through the entire assignment at least twice before beginning to do any work. This will help you familiarize yourself with all of the important facts. Transactions for 2018: Sales and Accounts Receivable 1. a. BBB's bats during 2018 had a sales price of $65 per bat. All sales were made on account. b. Cash collections on account amounted to $165,000. c. On July 1, 2018, BBB identified $10,000 of receivables as being uncollectible and wrote them off. d. BBB follows a percentage-of-receivables approach to estimate their accounts receivable that will become uncollectible. As of the end of 2017, BBB estimates that 15% of their receivables will be uncollectible. 2. Inventory a. BBB began 2018 with 1,000 bats which had a cost of $20 each. Employees physically counted 800 bats remaining in the warehouse at the end of 2018. BBB uses a periodic LIFO inventory system to cost their inventory. The following purchases (all on account) were made during 2018: i. January 15th-750 bats @ $22.00 each ii. March 22nd - 1,000 bats@ $25.00 each iii. August 5th- 1,250 bats @ $28.00 each iv. October 26th- 1,500 bats @ $30.00 each b. During 2018, BBB made cash payments to inventory suppliers on the following dates: i. January 29th - $13,200 ii. April 16th -$30,000 iii. October 2nd - $35,000 Novembe 30h 27 000 aani. 3. Property, Plant and Equipment BBB uses straight-line depreciation for all of its store fixtures and office equipment b. Below is a schedule of the store fixtures and office equipment BBB had in place at the end a. of 2017, FIXTURES AND EQUIPMENT (as of December 31, 2017) Estimated Useful Life 10 years 8 years 6 years c. On January 1, 2018 new store fixtures were purchased for $16,000 in cash. BBB expects the fixtures to have a 10 year useful life and a $4,000 salvage value. d. On April 1, 2018 office equipment (ID# 1876) was sold for $8,000. Historical Cost $24,000 $15,000 $31,000 ID # Estimated Salvage Value $0 Date acquired 1256 Jan. 1, 2012 Jan. 1, 2015 Jan. 1, 2016 $3,000 $7,000 1876 4299 Debt a. On November 1, 2018, BBB paid-off the note payable that was outstanding at the beginning of the period. The note had a 12 % interest rate, had been issued on November 1, 2017, and required semiannual interest payments on April 30, 2018 and October 31, 2018. b. On December 1, 2018, BBB borrowed $45,000 on a new note payable. The new note carries an 8% interest rate with semiannual interest payments required on May 31, 2019 and M mbar 30, 2019. sers/asus/Downloads/BobsBaseballBats Fall2019.pdf Bob's Baseball Bats Balance Sheet For the Year Ended December 31, 2017 Assets Cash $ 45,000 35,000 Accounts Receivable Less: Allowance for Doubtful Accounts (6,750) Net Accounts Receivable 38,250 17,500 Prepaid Rent Inventory 20,000 $ 110,750 Total Current Assets 70,000 Property, Plant, and Equipment Less: Accumulated Depreciation Net Property, Plant, and Equipment Total Assets (20,500) 49,500 160,250 $ Liabilities and Owner's Equity Accounts Payable Wages Payable Interest Payable Income Taxes Payable Notes Payable Total Current Liabilities 3,000 2,000 1,200 3,500 60,000 69,700 15,000 Common Stock (15,000 shares outstanding, $1 par) Additional Paid In Capital Retained Earnings Total Liabilities and Owner's Equity 20,000 55,550 $ 160,250 bsBseballBats Fall2019.pdf Bob's Baseball Bats Journal Entries Date Account Debit Credit
