Chapter 13 Homework 1 2 The unadjusted trial balance of the Formidable Fabrications at December 31, 2021, the end of its fiscal year, included the following account balances. Formidable's 2021 financial statements were issued on April 1, 2022. 3 4 5 6 7 Accounts receivable Accounts payable 12% notes, payable to bank Mortgage note payable Other information: $ 103,000 41,000 658,000 8 9 1 2 3 4 a. The bank notes, issued August 1, 2021, are due on July 31, 2022, and pay interest at a rate of 12%, payable at maturity. b. The mortgage note is due on March 1, 2022. Interest at 11% has been paid up to December 31 Formidable intended at December 31, 2021, to refinance the note on its due date with a new 10-year mortgage note. In fact, on March 1, Formidable paid $370,000 in cash on the principal balance and refinanced the remaining $975,000 C. Included in the accounts receivable balance at December 31, 2021, were two subsidiary accounts that had been overpaid and had credit balances totaling $16,700. The accounts were of two major customers who were expected to order more merchandise from Formidable and apply the overpayments to those future purchases. d. On November 1, 2021, Formidable rented a portion of its factory to a tenant for $34,200 per year, payable in advance. The payment for the 12 months ended October 31, 2022, was received as required and was credited to rent 5 6 revenue 7 8 9 Required: 1. Prepare any necessary adjusting journal entries at December 31, 2021, pertaining to each item of other information (a-d). 2. Prepare the current and long-term liability sections of the December 31, 2021, balance sheet. 0 21 22 B D E F A 1 Chapter 13 Homework 2 3 4 5 6 Current liabilities Formidable Fabrications Balance Sheet (partial) December 31, 2021 7 Accounts payable Current portion of long-term debt 8 9 10 Customer advances 11 12 Notes payable 13 Total current liabilities 14 Long-term liabilities 15 16 Total liabilities 17 18 (a) 19 20 21 (b) 22 23 (c) 24 25 26 (d) 27 28 29 30