Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

COMPREHENSIVE APPLICATION PROJECT The following is a list of accounts (balances as of Dec. 31, 2021) that will be needed to accurately complete this project.

COMPREHENSIVE APPLICATION PROJECT

The following is a list of accounts (balances as of Dec. 31, 2021) that will be needed to accurately complete this project. You will have to journalize all appropriate transactions associated with the transactions below associated with 2022 (if decimals exist, please round to the nearest whole number). In addition, you will need to prepare an income statement, a retained earnings statement, and a detailedcomprehensive balance sheet for December 31, 2022.

Cash

$2,538,241

Accounts Payable

103,000

Long-term Notes Payable

$120,000

Intangible Assets

$1,227,845

FUTA Taxes Payable

$40

Treasury Stock

$135,000

FICA Taxes Payable

$7,700

Unearned Revenue

$16,000

Retained Earnings

$648,592

SUTA Taxes Payable

$60

Accounts Receivable

$1,434,485

Inventory

$780,000

Dividends Payable

$210,000

Federal Inc. Tax Withholding Payable

$35,000

LIFO Reserve

$139,700

Allowance for Doubtful Accounts

$43,035

Machinery

$300,000

Bonds Payable

$1,000,000

Estimated Warranty Payable

$18,500

Common Stock, $5 par value

$2,400,000

Equipment

$65,000

Additional Paid-in Capital

$1,590,000

Accumulated Depreciation – Equipment

$56,884

Accumulated Depreciation – Machinery

$141,797

Discount on Bonds Payable

$49,737

1- On January 1, 2022, we received a $230,000, 3% interest, 3-year note for goods sold. The cost of the goods sold was $165,000. The prevailing market interest rate is 5% at the time the note is received. Interest on the note is due annually on January 1.

2- During the year, we wrote-off $48,500 of our uncollectible accounts.

3- Purchased a truck for $112,000 cash on September 8, 2022. The truck has a five year useful life and will be depreciated using the double-declining depreciation method.

4- Paid the dividends that were owed.

5- Purchased inventory of $1,300,000 by paying $250,000 on account and the remainder in cash.

6- Paid the estimated warranties owed.

7- On March 3, 2022, reissued the treasury stock currently held in the treasury at cost.

8- Collected $960,000 of our accounts receivable.

9- Paid all payroll taxes that were owed as of Dec. 31, 2021.

10- A machine which cost $300,000 was acquired on October 1, 2019. Its estimated salvage value is $30,000 and its expected life is eight years. Record any necessary 2022 entries associated with this machine. The machine is depreciated using the double-declining balance method. On September 1, 2022, this machine has a fair value of $210,000 and is exchanged for similar machinery having a fair value of $190,000 and $20,000 cash is received. This exchange lacks commercial substance. The new machinery is depreciated using the double-declining balance method and has an eight year useful life.

11- On April 30, 2022, declared a $0.25 per share cash dividend, payable May 15, 2022 to stockholders of record on May 8, 2022.

12- Judd Company sells computers for $1,700 each. The cost of the computers was $1,100 each. During 2022, the company sold 900 computers. 70% of the sales were on account, the remainder of the sales were for cash. Judd also sells an extended warranty for $80 more, which protects the buyer for 2 years. 80% of the sales purchased the additional warranty. All extended warranty purchases were made for cash. We estimate that the total cost of servicing these warranties will be $34,000. During 2022, we spent $6,000 servicing warranties from this year’s sales.

13- Judd Company has ending inventory in 2017 of $500,000, an ending inventory of $605,000 in 2018, an ending inventory of $713,000 in 2019, an ending inventory of $786,000 in 2020, and an ending inventory of $780,000 in 2021. The price index for each year is 100, 110, 115,120, 125 respectively. The price index for 2022 is 130. Using dollar-value LIFO, calculate the ending inventory that should be reported on the 2022 year-end balance sheet (report it appropriately).

14- Purchased 30,000 shares of stock for treasury for $8 per share.

15- Assume that the estimate of uncollectible accounts is determined by taking 3% of gross accounts receivable and is accounted for on December 31.

16- On January 1, 2015, Judd Company sold $1,000,000 in long-term bonds. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on December 31 of each year. The bonds are to be accounted for under the effective-interest method.

17- Issued 130,000 shares of stock for $13 per share.

18- On September 30, 2022, Judd purchases equipment by issuing a $180,000, 3%, 5-year note. The market rate of interest for similar notes is 4%. The equipment has a 10-year useful life and a $10,000 salvage value. The equipment is to be depreciated using the straight-line method.

19- On Dec. 12, 2022, declared a $0.40 per share cash dividend, payable February 15, 2023 to stockholders of record on February 5, 2023.

20- On December 31, 2022, we redeemed $750,000 of the bonds described in transaction (16) at 101, after all other entries have been recorded.

21- On December 31, 2022, Judd Company accrues that payroll that has been earned during the last payroll cycle. As of that date, payroll was $320,000, of which $90,000 represented amounts paid in excess of $118,500 to certain employees. The amount paid to employees in excess of $7,000 was $305,000. Income taxes withheld were $48,000. The state unemployment tax is 1.2%, the federal unemployment tax is .8%, and the F.I.C.A. tax is 7.65% on an employee’s salaries and wages to $118,500 and 1.45% in excess of $113,700. The payroll will be paid on January 8, 2023.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

1 On January 1 2022 we received a 230000 3 interest 3year note for goods sold The cost of the goods sold was 165000 The prevailing market interest rate is 5 at the time the note is received Interest o... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting: A Business Process Approach

Authors: Jane L. Reimers

3rd edition

978-013611539, 136115276, 013611539X, 978-0136115274

More Books

Students also viewed these Accounting questions

Question

e. What are the programs research and clinical focus areas?

Answered: 1 week ago

Question

which is the normat form for the following table: 1. OVif

Answered: 1 week ago