COMPRHENSIVE ACCOUNTING CYCLE REVIE EWENCCOUNT NGO OLE I REVIEW ACR9-1 Milo Corporation's unadjusted trial balance at December 1, 2017, is presented below Debit Credit Cash s 22,000 36,800 10,000 Accounts Receivable Notes Receivable Interest Receivable Inventory 36,200 3,600 20,000 150,000 60,000 9,000 Prepaid Insurance Land Buildings Equipment Patent Allowance for Doubtful Accounts Accumulated Depreciation-Buildings Accumulated Depreciation-Equipment Accounts Payable Salaries and Wages Payable Notes Payable (due April 30, 2018) Income Taxes Payable Interest Payable Notes Payable (due in 2023) Common Stock Retained Earnings Dividends Sales Revenue $ 500 50,000 24,000 27,300 11,000 35,000 50,000 63,600 900,000 12.000 Debit Credit Interest Revenue Gain on Disposal of Plant Assets Bad Debt Expense Cost of Goods Sold Depreciation Expense Income Tax Expense Insurance Expense Interest Expense Other Operating Expenses Amortization Expense Salaries and Wages Expense 630,000 61,800 110,000 $1,161.400 $1,161,400 The following transactions occurred during December Purchased equipment for s16,000, plus sales taxes of $800 (paid in cash). 2 2 Dec. Milo sold for $3,500 equipment which originally cost $5,000. Accumulated depreciation on this equipment at January 1, 2017, was $1,800: 2017 depre- ciation prior to the sale of equipment was $825. Milo sold for $5,000 on account inventory that cost $3,500, Salaries and wages of $6,600 were paid. 15 23 Adjustment data: I. Milo estimates that uncollectible accounts receivable at year-end are $4,000. 2. The note receivable is a 1-year, 8% note dated April 1, 2017, No interest has been recorded. 3. The balance ce in prepaid insurance represents payment of a $3,600, 6-month premiunm on September 1, 2017 4. The building is being depreciated using the straight-line method over 30 years. The salvage value is $30,000. 5. The equipment owned prior to this year is being depreciated using the straight-line method over 5 years. The salvage value is 10% of cost. 6. The equipment purchased on December 2, 2017, is being depreciated using the straight-line method over 5 years, with a salvage value of $1,800. 7. The patent was acquired on January 1, 2017, and has a useful life of 9 years from that date 8. Unpaid salaries at December 31, 2017, total $2,200. 9. Both the short-term and long-term notes payable are dated January 1, 2017, and carry a 10% interest rate. All interest is payable in the next 12 months. 10. Income tax expense was $15,000. It was unpaid at December 31. Instructions (a) Prepare journal entries for the transactions listed above and adjusting entries. (b) Prepare an adjusted trial balance at December 31, 2017 (c) Prepare a 2017 income statement and a 2017 retained earnings state (d) Prepare a December 31, 2017, balance sheet ment. ACR9 2 Aberkonkie Corporation prepares quarterly financial statements. The post closing trial balance at December 31, 2016, is presented below. ABERKONKIE CORPORATION Post-Closing Trial Balance December 31, 2016 Debit 24,300 Credit Cash Accounts Receivable Allowance for Doubtful Accounts Equipment Accumulated Depreciation-Equipment Buildings Accumulated Depreciation-Buildings Land Accounts Payable Common Stock 22,400 20,000 100,000 20,000 $ 1,200 15,000 15 90,000 Retained Earnings $186,700 $186,700