Comprehensive Accounting Cycle Review

15.ACR Quigley Corporation's trial balance at December 31, 2020, is presented below. All 2020 transactions have been recorded except for the items described below.

	Debit	Credit
Cash	$ 25,500
Accounts Receivable	51,000
Inventory	22,700
Land	65,000
Buildings	95,000
Equipment	40,000
Allowance for Doubtful Accounts		$ 450
Accumulated DepreciationBuildings		30,000
Accumulated DepreciationEquipment		14,400
Accounts Payable		19,300
Interest Payable		-0-
Dividends Payable		-0-
Unearned Rent Revenue		8,000
Bonds Payable (10%)		50,000
Common Stock ($10 par)		30,000
Paid-in Capital in Excess of ParCommon Stock		6,000
Preferred Stock ($20 par)		-0-
Paid-in Capital in Excess of ParPreferred Stock		-0-
Retained Earnings		75,050
Treasury Stock	-0-
Cash Dividends	-0-
Sales Revenue		570,000
Rent Revenue		-0-
Bad Debt Expense	-0-
Interest Expense	-0-
Cost of Goods Sold	400,000
Depreciation Expense	-0-
Other Operating Expenses	39,000
Salaries and Wages Expense	65,000
Total	$803,200	$803,200

Unrecorded transactions and adjustments:

• 1.On January 1, 2020, Quigley issued 1,000 shares of $20 par, 6% preferred stock for $22,000.
• 2.On January 1, 2020, Quigley also issued 1,000 shares of common stock for $23,000.
• 3.Quigley reacquired 300 shares of its common stock on July 1, 2020, for $49 per share.
• 4.On December 31, 2020, Quigley declared the annual cash dividend and a $1.50 per share dividend on the outstanding common stock, all payable on January 15, 2021.
• 5.Quigley estimates that uncollectible accounts receivable at year-end is $5,100.
• 6.The building is being depreciated using the straight-line method over 30 years. The salvage value is $5,000.
• 7.The equipment is being depreciated using the straight-line method over 10 years. The salvage value is $4,000.
• 8.The unearned rent was collected on October 1, 2020. It was the receipt of 4 months' rent in advance (October 1, 2020 through January 31, 2021).
• 9.The 10% bonds payable pay interest every January 1. The interest for the 12 months ended December 31, 2020, has not been paid or recorded.

Instructions

(Ignore income taxes.)

(a)

Prepare journal entries for the transactions and adjustment listed above.

(b)

Prepare an updated December 31, 2020, trial balance, reflecting the journal entries in (a).

Total $871,200

(c)

Prepare a multiple-step income statement for the year ending December 31, 2020.

(d)

Prepare a retained earnings statement for the year ending December 31, 2020.

(e)

Prepare a classified balance sheet as of December 31, 2020.

Total assets $273,400