EASY LTD Unadjusted Trial Balance 30 November 2020 100,000 175,000 6. 50,000 80,000 The equipment has no salvage value and a useful life of 10 years. The equipment was purchased at January 1, 2018. There has been no adjustment to account for depreciation for the current year of 2020. Easy LTD applies double declining balance method for the equipment. After adjusting the depreciation, Easy LTD sold the equipment with sales price of $35.960 in cash. The building has a useful life of 50 years with no salvage value. Building was purchased at January 1, 2019. There has been no adjustment to account for depreciation for the current year of 2020. Easy LTD applies double declining-balance method for the building, 200,000 Account Debits Credit Cash Accounts Receivable Allowance for Doubtful Accounts 25,000 Merchandise Inventory Equipment Accumulated Depreciation Equipment 28.800 Building Accumulated Depreciation - Building 8,000 Accounts Payable 60,000 Short-term Financial Debt Long-term Financial Debt 92,762 Common Stock 185,200 Sales 550,000 Sales Returns and Allowances Sales Discounts Cost of Goods Sold Salary & Wage Expense 60,000 Utility Expense Supplies Expense Total $ 957,000 $ 957,000 7,238 7. Easy LTD borrowed an $100,000,7%, 10-year financial debt at December 31, 2019 with equal annual payments. Journalize the first installment payment occurred at December 31, 2020. After payment, reclassify total financial debt as short-term and long-term and adjust the accounts. 25.000 25.000 8. 31, 2020, Easy LTD paid $12,000 to its insurance company for the next 12 months at December 200,000 30,000 9. 12,000 On December 1, Easy LTD purchased a 25% equity in ABC Company for $18,000. At December 31, ABC reported net income of $16,000 and declared and paid a $3,600 cash dividend. Transactions 10. Calculate provision for corporate tax expense by assuming 25% corporate tax rate. Easy Ltd. is a retailer following the perpetual inventory method. Assume that there are no credit transactions and all amounts are settled in cash. The following information for Easy Ltd. for the month of December 2020 are provided below: Required: a) Open ledger accounts and journalize the transactions. (60%) Unit Cost or Selling Price () Quantity b) Prepare adjusted trial balance and multiple-step income statement for the period ended December 31, 2020. (10%) 100 Date Description December 1 Beginning inventory (as stated in trial balance) December 10 Purchase December 12 Purchase return December 20 Sale 150 500 600 c) Prepare a classified statement of financial position as of December 31, 2020. (10%) 600 50 125 800 1.-3. Journalize each of the transactions by following FIFO cost flow assumption. 4.-5. Easy LTD management authorizes a write-off of the $5,000 balance on December 21, 2020. After write-off aging schedule for Easy LTD is presented below. Number of Days Past Due Customer Total Not Yet Due. 1-20 21-60 1-30 61-90 Over 90 Ci 25.000 5,000 20,000 C2 10,000 10,000 C3 30,000 30,000 Total 10,000 10,000 30,000 5,000 20,000 Estimated Percentage Uncollectible 10% 30% 75% 20,000 25,000 EASY LTD Unadjusted Trial Balance 30 November 2020 100,000 175,000 6. 50,000 80,000 The equipment has no salvage value and a useful life of 10 years. The equipment was purchased at January 1, 2018. There has been no adjustment to account for depreciation for the current year of 2020. Easy LTD applies double declining balance method for the equipment. After adjusting the depreciation, Easy LTD sold the equipment with sales price of $35.960 in cash. The building has a useful life of 50 years with no salvage value. Building was purchased at January 1, 2019. There has been no adjustment to account for depreciation for the current year of 2020. Easy LTD applies double declining-balance method for the building, 200,000 Account Debits Credit Cash Accounts Receivable Allowance for Doubtful Accounts 25,000 Merchandise Inventory Equipment Accumulated Depreciation Equipment 28.800 Building Accumulated Depreciation - Building 8,000 Accounts Payable 60,000 Short-term Financial Debt Long-term Financial Debt 92,762 Common Stock 185,200 Sales 550,000 Sales Returns and Allowances Sales Discounts Cost of Goods Sold Salary & Wage Expense 60,000 Utility Expense Supplies Expense Total $ 957,000 $ 957,000 7,238 7. Easy LTD borrowed an $100,000,7%, 10-year financial debt at December 31, 2019 with equal annual payments. Journalize the first installment payment occurred at December 31, 2020. After payment, reclassify total financial debt as short-term and long-term and adjust the accounts. 25.000 25.000 8. 31, 2020, Easy LTD paid $12,000 to its insurance company for the next 12 months at December 200,000 30,000 9. 12,000 On December 1, Easy LTD purchased a 25% equity in ABC Company for $18,000. At December 31, ABC reported net income of $16,000 and declared and paid a $3,600 cash dividend. Transactions 10. Calculate provision for corporate tax expense by assuming 25% corporate tax rate. Easy Ltd. is a retailer following the perpetual inventory method. Assume that there are no credit transactions and all amounts are settled in cash. The following information for Easy Ltd. for the month of December 2020 are provided below: Required: a) Open ledger accounts and journalize the transactions. (60%) Unit Cost or Selling Price () Quantity b) Prepare adjusted trial balance and multiple-step income statement for the period ended December 31, 2020. (10%) 100 Date Description December 1 Beginning inventory (as stated in trial balance) December 10 Purchase December 12 Purchase return December 20 Sale 150 500 600 c) Prepare a classified statement of financial position as of December 31, 2020. (10%) 600 50 125 800 1.-3. Journalize each of the transactions by following FIFO cost flow assumption. 4.-5. Easy LTD management authorizes a write-off of the $5,000 balance on December 21, 2020. After write-off aging schedule for Easy LTD is presented below. Number of Days Past Due Customer Total Not Yet Due. 1-20 21-60 1-30 61-90 Over 90 Ci 25.000 5,000 20,000 C2 10,000 10,000 C3 30,000 30,000 Total 10,000 10,000 30,000 5,000 20,000 Estimated Percentage Uncollectible 10% 30% 75% 20,000 25,000