Complete a closing trial balance, recording the following activities and transactions within the trial balance provided which has the beginning trial balance for the company.

Cash 500,000

Accounts Receivable 2,500,000

Inventory 3,700,000

Property, Plant, Equipment (net) 10,000,000

Accounts Payable (4,500,000)

Interest Payable

Current Portion of LT Debt (200,000)

Long-Term Debt (1,800,000)

Common Stock, $5 par (50,000)

Additional Paid in Capital (3,050,000)

Retained Earnings (7,100,000)

Sales

Cost of Goods Sold

Operations Expense

Depreciation

Sales, General & Administrative

Interest Expense

Taxes

Total

Accounts Receivable 500,000

Inventory 1,200,000

Property, Plant, Equipment (net) 3,000,000

Accounts Payable 200,000

Current Portion of LT Debt 100,000

LT Debt 400,000

Operational Activities

Collects all beginning Accounts Receivable.

Purchases $7.1 million of Inventory on account (credit).

Sells $13 million to customers on credit at Inventory cost of $7.8 million.

Collects $10 million of Accounts Receivable from current year sales.

Pays all beginning Accounts Payable.

Pays all beginning Current Portion of Long-term Debt.

Incurs and pays $1 million in operational expense and $500,000 in Sales, General, and Administrative expenses.

Adjusting Entries

Record Depreciation Expense of $100,000

Accrue Interest Expense of $120,000

Reclassify $200,000 of Long-term Debt into Current portion of Long-term Debt

Record (and pay in cash) taxes at 40% of current year Income before Taxes

Merger

Able Company purchases Beta Company for $4 million cash in a merger transaction.

Beta Company has the following balances at the time of the merger (book values and fair values are the same):

Accounts Receivable $500,000

Inventory $1.2 million

Property, Plant, Equipment (net) $3 million

Accounts Payable $200,000

Current Portion of Long-term Debt $100,000

Long-term Debt $400,000