During the first quarter of 2017, the following transactions occurred: 1. On February 1, Flounder collected fees of $10,560 in advance. The company will perform $880 of services each month from February 1, 2017, to January 31, 2018 2. On February 1, Flounder purchased computer equipment for $7,920 plus sales taxes of $528, $2,640 cash was paid with the rest on account. Check #455 was used. 3. On March 1, Flounder acquired a patent with a 10-year life for $8,448 cash. Check #456 was used 4. On March 28, Flounder recorded the quarter's sales in a single entry. During this period, Flounder had total sales of $123,200 (not including the sales referred to in item 1 above). All of the sales were on account 5. On March 29, Flounder collected $117,040 from customers on account 6. On March 29, Flounder paid $14,410 on accounts payable. Check #457 was used 7. On March 29, Flounder paid other operating expenses of $85,820. Check #458 was used 8. On March 31, Flounder wrote off a receivable of $180 for a customer who declared bankruptcy. 9. On March 31, Flounder sold for $1,430 equipment that originally cost $9,680. It had an estimated life of 5 years and salvage of $880. Accumulated depreciation as of December 31, 2016, was $7,040 using the straight line method. (Hint: Record depreciation on the equipment sold, then record the sale.) Bank reconciliation data and adjustment data 1. The company reconciles its bank statement every quarter. Information from the December 31, 2016, bank reconciliation is: Deposit in transit: 12/30/2016 $4,400 3,030 290 760 5,140 Outstanding checks #440 #452 #453 #454 The bank statement received for the quarter ended March 31, 2017, is as follows: Windows [] Windows Beginning balance per bank Deposits: 1/2/2017, $4,400; 2/2/2017, $10,560; 3/30/2017, $117,040 Checks: #452, $290; #453, $760; #457, $14,410; #458, $85,820 $26,210 132,000 (101,280) The bank statement received for the quarter ended March 31, 2017, is as follows: Beginning balance per bank Deposits: 1/2/2017, $4,400; 2/2/2017, $10,560; 3/30/2017, $117,040 Checks: #452, $290; #453, $760; #457, $14,410; #458, $85,820 Debit memo: Bank service charge (record as operating expense) Ending bank balance $26,210 132,000 (101,280) (100) $56,830 2. Record revenue earned from item 1 above 3, $22,880 of accounts receivable at March 31, 2017, are not past due yet. The bad debt percentage for these is 4%. The balance of accounts receivable are past due. The bad debt percentage for these is 23.75%. Record bad debt expense. (Hint: You will need to compute the balance in accounts receivable before calculating this.) 4. Depreciation is recorded on the equipment still owned at March 31, 2017. The new equipment purchased in February is being depreciated on a straight-line basis over 5 years and salvage value was estimated at $1,060. The old equipment still owned is being depreciated over a 10-year life using straight-line with no salvage value 5. Depreciation is recorded on the building on a straight-line basis based on a 30-year life and a salvage value of $8,800 6. Amortization is recorded on the patent. 7. The income tax rate is 30%. This amount will be paid when the tax return is due in April. (Hint: Prepare the income statement up to income before taxes and multiply by 30% to compute the amount.) Enter the December 31, 2016, balances in ledger accounts using T-accounts. (Post entries in the order displayed in the problem statement.) Cash Accounts Receivable Allowance For Doubtful Accounts Equipment Accumulated Depreciation-Equipment Land Buildings Accumulated Depreciation-Buildings Windows Accounts Payable Accumulated Depreciation-Buildings Accounts Payable Common Stock Retained Earnings Post the journal entries to the ledger accounts for items 1-9. (Post entries in the order of journal entries presented above.) Cash Bal 21,390 Winc : Accounts Receivable Patents Accounts Payable Bal 10,890 Unearned Service Revenue Common Stock Bal 79,200 Retained Earnings Bal Service Revenue 46,750 Other Operating Expenses Depreciation Expense Depreciation Expense Loss on Disposal of Plant Assets Prepare an unadjusted trial balance at March 31. Flounder Corp. Trial Balance 3/31/17 Debit Credit Cash Accounts Receivable Allowance for Doubtful Accounts Equipment Accumulated Depreciation-Equipment Land Buildings Accumulated Depreciation-Buildings Patents Accounts Payable Unearned Service Revenue Common Stock Retained Earnings Service Revenue Other Operating Expenses Depreciation Expense Loss on Disposal of Plant Assets Totals Prepare a bank reconciliation in good form. (List items that increase balance as per bank first.) Flounder Corp Bank Reconciliation 3/31/17 Balance Per Bank Add Deposits in Transit Less Outstanding Checks #440 #455 #456 #454 Adjusted Balance Per Bank Service Revenue 3. 3/31/2017 Bad Debt Expense Allowance for Doubtful Accounts 4. 3/31/2017 Depreciation Expense Accumulated Depreciation-Equipment 5. 3/31/2017 Depreciation Expense Accumulated Depreciation-Buildings 6. 3/31/2017 Amortization Expense Patents 7. 3/31/2017 Income Tax Expense Income Taxes Payable Post entries related to bank reconciliation and all adjusting entries. (Post entries in the order presented in the previous part. Round answers to O decimal places, e.g 5,275.) Bal Feb. 1 Mar. 29 Mar. 31 Cash 21,390 Feb. 1 10,560 Mar. 1 117,040 Mar. 29 2,640 8,448 14,410 85,820 1,430 Mar. 29 Accounts Receivable 19,710 Mar. 29 123,200 Mar. 31 117,040 Bal Mar. 28 180 Windows [] Windows Allowance for Doubtful Accounts 180 Bal 1,060 Mar. 31 Allowance for Doubtful Accounts Mar. 31 180 Bal. 1,060 Equipment 17,600 Mar. 31 8,448 Bal 9,680 Feb. 1 Accumulated Depreciation-Equipment Mar. 31 7,480 Bal. 13,200 Mar. 31 440 Land Bal 17,600 Buildings Bal 88,000 Accumulated Depreciation-Buildings Bal 13,200 Patents Mar. 1 8,448 Accounts Payable Mar. 29 14,410 Bal. 10,890 Feb. 1 5,808 Accounts Payable Mar. 29 14,410 Bal. 10,890 Feb. 1 5,808 Unearned Service Revenue Feb. 1 10,560 Income Taxes Payable Common Stock Bal 79,200 79,200 Retained Earnings Bal 46,750 46,750 Service Revenue Mar. 28 123,200 Service Revenue Mar. 28 123,200 Other Operating Expenses Mar. 29 85,820 Depreciation Expense Mar. 31 440 Loss on Disposal of Plant Assets Loss on Disposal of Plant Assets Mar. 31 770 770 Amortization Expense Bad Debt Expense Income Tax Expense