Question
Cash $3,090 Accounts Receivable 9,900 Allowance for Doubtful Accounts $100 Inventory 17,750 Supplies 1,400 Land 9,000 Buildings and Equipment 42,000 Accumulated Depreciation 4,200 Accounts Payable
Cash $3,090
Accounts Receivable 9,900
Allowance for Doubtful Accounts $100
Inventory 17,750
Supplies 1,400
Land 9,000
Buildings and Equipment 42,000
Accumulated Depreciation 4,200
Accounts Payable 10,700
Common Stock 20,000
Retained Earnings (1/1/2016) 42,400
Dividends 2,000
Sales Revenue 69,700
Cost of Goods Sold 36,860
Salaries Expense 12,500
Advertising Expense 8,100
Other Expenses 4,500
Dec. 4 Made cash sales of $3,000; the cost of the inventory sold was $1,800.
7 Purchased $2,400 of inventory on credit.
14 Collected $900 of accounts receivable.
18 Sold land for $7,800; the land originally cost $5,000.
20 Made credit sales of $4,000; the cost of the inventory sold was $2,400.
21 Returned $360 of defective inventory to supplier for credit to the Davis Companys account.
27 Purchased $1,250 of inventory for cash.
28 Paid $1,100 of accounts payable.
31 Purchased land at a cost of $6,000; made a $1,000 down payment and signed a 12%, 2-year note for the balance.
Required: 1. Prepare general journal entries to record the preceding transactions.
2. Post to general ledger T-accounts.
3. Prepare a year-end trial balance on a worksheet and complete the worksheet using the following information:
a. accrued salaries at year-end total $1,200;
b. for simplicity, the building and equipment are being depreciated using the straight-line method over an estimated life of 20 years with no residual value;
c. supplies on hand at the end of the year total $630;
d. bad debts expense for the year totals $830;
e. the income tax rate is 30%; income taxes are payable in the first quarter of 2017
4. Prepare the companys financial statements for 2016.
5. Prepare the 2016 (a) adjusting and (b) closing entries in the general journal.
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