DEF Stores LTD Unadjusted Trial Balance 31 December 2019 $ Credit Account Cash Accounts Receivable Debit $ 55,000 75,000 5,000 0 100,000 60,000 480,000 400,000 Allowance for Doubtful Accounts Merchandise Inventory Share Investments Equipment Building Land Mortgage Payable Accounts Payable Common Stock Retained Earnings (As of 1 Jan. 2019) Sales Sales Returns and Allowances Sales Discounts Cost of Goods Sold Salary & Wage Expense Rent Expense 200,000 110,000 500,000 170,000 460,000 25,000 5,000 120,000 60,000 55,000 Total $ 1,440,000 $ 1,440,000 Transactions 1. DEF Stores LTD purchased merchandise on account from supplier D $40,000, terms 2/10, n/30. $1,000 freight cost is paid by the seller as cash. 2. DEF Stores LTD sold all existing merchandise on account $50,000, terms 1/10, n/30. Pricing policy of the company is cost plus 25% markup. $1,000 freight cost is paid by the seller as cash. 3. Customer (in transaction 2) returned 20% of goods to DEF Stores LTD. Assume that the goods were not defective. 4. Aging schedule for ABC Stores is presented below. Calculate missing values. Due Customer Y Z Total Estimated Percentage uncollectible Total Estimated Bad Debts Number of Days Past Due Not Yet Total 1-30 31-60 61-90 Over 90 50,000 10,000 10,000 25,000 5,000 15.000 5,000 5,000 5,000 10,000 10,000 75,000 15,000 15.000 5,000 25,000 15,000 4% 8% 10% 12% 60% ? ? ? ? ? At Dec. 31, 2019, unadjusted balance in Allowance for Doubtful Accounts is a credit of $5,000. 5. The equipment has no salvage value and a useful life of 8 years. The building has a useful life of 10 years with no salvage value. Both the equipment and building were purchased on December 1, 2019. There has been no adjustment to account for depreciation for the current year of 2019. DEF Stores LTD applies declining-balance method for the equipment and straight-line method for the building. 6. DEF Stores LTD issued an $200,000, 4%, 5-year mortgage note on December 31, 2018 with equal annual payments. Journalize the first installment payment occurred on December 31, 2019. 7. DEF stores LTD acquires 40% of the ordinary shares of XYZ plc for $100,000 on January 1, 2019 (reported as Share Investments in unadjusted trial balance). For 2019, XYZ reports net income of $10,000 and paid dividends of $4,000. 8. Rent of $5,000 were unrecorded and unpaid as of 31 December, 2019. 9. Corporate tax rate is 20%. Calculate corporate tax provision expense. Required: a) Open ledger accounts and journalize the transactions. (45%) DEF Stores LTD Unadjusted Trial Balance 31 December 2019 $ Credit Account Cash Accounts Receivable Debit $ 55,000 75,000 5,000 0 100,000 60,000 480,000 400,000 Allowance for Doubtful Accounts Merchandise Inventory Share Investments Equipment Building Land Mortgage Payable Accounts Payable Common Stock Retained Earnings (As of 1 Jan. 2019) Sales Sales Returns and Allowances Sales Discounts Cost of Goods Sold Salary & Wage Expense Rent Expense 200,000 110,000 500,000 170,000 460,000 25,000 5,000 120,000 60,000 55,000 Total $ 1,440,000 $ 1,440,000 Transactions 1. DEF Stores LTD purchased merchandise on account from supplier D $40,000, terms 2/10, n/30. $1,000 freight cost is paid by the seller as cash. 2. DEF Stores LTD sold all existing merchandise on account $50,000, terms 1/10, n/30. Pricing policy of the company is cost plus 25% markup. $1,000 freight cost is paid by the seller as cash. 3. Customer (in transaction 2) returned 20% of goods to DEF Stores LTD. Assume that the goods were not defective. 4. Aging schedule for ABC Stores is presented below. Calculate missing values. Due Customer Y Z Total Estimated Percentage uncollectible Total Estimated Bad Debts Number of Days Past Due Not Yet Total 1-30 31-60 61-90 Over 90 50,000 10,000 10,000 25,000 5,000 15.000 5,000 5,000 5,000 10,000 10,000 75,000 15,000 15.000 5,000 25,000 15,000 4% 8% 10% 12% 60% ? ? ? ? ? At Dec. 31, 2019, unadjusted balance in Allowance for Doubtful Accounts is a credit of $5,000. 5. The equipment has no salvage value and a useful life of 8 years. The building has a useful life of 10 years with no salvage value. Both the equipment and building were purchased on December 1, 2019. There has been no adjustment to account for depreciation for the current year of 2019. DEF Stores LTD applies declining-balance method for the equipment and straight-line method for the building. 6. DEF Stores LTD issued an $200,000, 4%, 5-year mortgage note on December 31, 2018 with equal annual payments. Journalize the first installment payment occurred on December 31, 2019. 7. DEF stores LTD acquires 40% of the ordinary shares of XYZ plc for $100,000 on January 1, 2019 (reported as Share Investments in unadjusted trial balance). For 2019, XYZ reports net income of $10,000 and paid dividends of $4,000. 8. Rent of $5,000 were unrecorded and unpaid as of 31 December, 2019. 9. Corporate tax rate is 20%. Calculate corporate tax provision expense. Required: a) Open ledger accounts and journalize the transactions. (45%)