Financial Statement Homework #2 Name(s) The purpose of this project is to apply the principles of accrual accounting in a real-world setting and construct an adjusted balance sheet and income statement that can be used to communicate the economic activity and financial . Specifically, this exercise requires you to record additional journal entries based on information provided and construct a classified balance sheet and multi-step income statement from the adjusted trial balance. Points will be awarded based on accuracy of the additional journal entries and the financial statements produced. 400 10,000 Gold, Inc December 31, 2019 Unadjusted Trial balance Cash 34,000 Accounts Receivable 29,000 Allowance for Doubtful Accounts 1,600 Short term Note Receivable 50,000 Interest Receivable Prepaid Insurance 32,000 Inventory-Raw Materials 19,000 Inventory- Work in Process 45,000 Inventory- Finished Goods 4,000 Equipment 105,000 Accumulated Depreciation Trademark 55,000 Accumulated Amortization Accounts Payable Unearned Revenue Wages Payable Long-Term Notes Payable Common Stock Retained Earnings Dividends 3,000 Sales Sales Discounts 5,800 COGS 448,000 Delivery Expense 17,000 Amortization Expense Bad Debt Expense Rent Expense 42,000 Insurance Expense 49,000 Wages Expense 95,000 Gain/(Loss) on Sale Interest Expense 4,000 Interest Revenue Income Tax Expense 11,000 Total 1,049,800 33,000 22,500 25,000 2,000 45,000 90,000 117,000 703,000 2,300 1,049,800 Part 1: Prepare the additional journal entries: 1. The company earns 6 percent interest annually on its short-term note receivable, but has not recorded any entries for the month of December 2. An aging of the accounts receivable suggests there is $900 of receivables that will not be collectible. Record the required adjusting journal entry. 3. During December, the Company completed production on 400 units of inventory at a unit cost of $50 per unit. Record the necessary journal entry for this activity. 4. The Company's finished goods inventory, prior to the completed production from #3 above included 100 units. Suppose the Company uses the FIFO method and sold 160 units on account the last week of December for $10,000. Record the entries attributable to this sale. 5. Gold revises its estimate of the useful life on its equipment, which is all used in the production process, from 10 to 13 years total. Assuming the equipment's salvage value is $5,000 and the equipment was placed in service January 1, 2018, record the depreciation charge for the current year on the equipment. 6. The trademark sold for $11,000 on Dec 31st. The trademark was acquired January 1, 2013 and had a ten year useful life with no salvage value. Record the amortization year-end adjusting journal entry and the entry for the sale of the trademark. Part 2: Post the additional journal entries to t-accounts TTT TTT TTT TTT Part 3: Prepare the Adjusted Trial Balance (i.e., use ending balances after the previous journal entries are posted) Gold, Inc December 31, 2019 Adjusted Trial balance Debit Credit Cash Accounts Receivable Allowance for Doubtful Accounts Short term Note Receivable Interest Receivable Prepaid Insurance Inventory-Raw Materials Inventory- Work in Process Inventory- Finished Goods Equipment Accumulated Depreciation Trademark Accumulated Amortization Accounts Payable Unearned Revenue Wages Payable Long-Term Notes Payable Common Stock Retained Earnings Dividends Sales Sales Discounts COGS Delivery Expense Amortization Expense Bad Debt Expense Rent Expense Insurance Expense Wages Expense Gain/(Loss) on Sale Interest Expense Interest Revenue Income Tax Expense Total Part 4: Prepare a Multi-step Income Statement and a Classified Balance Sheet
