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Flash Companys trial balance at November 30, 2020, is presented below. Flash Company uses a periodic inventory system (With FIFO cost flow method). Flash Company

Flash Companys trial balance at November 30, 2020, is presented below. Flash Company uses a periodic inventory system (With FIFO cost flow method).

Flash Company

November 30, 2020 Trial Balance

DR

CR

Accounts Receivable

$378,000

Allowance for Doubtful Accounts

$45,000

Accumulated Depreciation- Building

79,000

Accumulated Depreciation- Equipment

45,600

Accumulated Amortization - Patents

3,000

Building

462,000

Cash

150,000

Dividends

-

Equipment

167,230

Goodwill

24,000

Patents

60,000

Inventory

251,000

Land

251,000

Prepaid Insurance

5,800

Accounts Payable

267,000

Notes Payable

-

Unearned Revenue

10,000

Interest Payable

-

Share Capital ($5 par)

880,000

Retained Earnings

295,730

Sales

833,720

Sales Returns & Allowances

10,000

Amortization Expense

200

Bad Debt Expense

-

Cost of Goods Sold

501,350

Depreciation Expense- Building

10,000

Depreciation Expense- Equipment

5,600

Interest Expense

6,000

Insurance Expense

1,670

Entertainment Expense

Postage Expense

Miscellaneous Expense

Gain/Loss on Disposal of Equipment

-

Rent Expense

69,400

Utility Expense

11,000

Wages & Salaries Expense

94,800

Totals

$2,459,050

$2,459,050

December normal Journal Entries

Date

Transaction

Dec 1

Paid rent expense of $10,000 for December.

Dec 1

Took out bank note for $300,000 with an interest rate of 12% ($5,000 of the note payable become due in 2021).

Dec 3

Purchased 1,000 units of inventory for $500,000 terms 2/10 net 30

Dec 5

Sold land with cost of $35,000 for $55,000.

Dec 8

Sold equipment with original cost of $50,000 and accumulated depreciation of $25,000 for $12,000.

Dec 9

Purchased building for $40,000.

Dec 10

Sold 400 units of inventory on account for $600,000.

Dec 11

Paid for inventory purchased December 3.

Dec 12

Paid postage $200, Miscellaneous $400, Entertainment $170 in cash.

Dec 18

Wrote off uncollectible account $25,000.

Dec 20

Received payment in full for sale on December 10.

Dec 31

Declared and paid dividends of $1 per share.

Dec 31

Paid wages and salaries of $15,000.

Additional information:

1. A record stated that beginning inventory on December 1 should be 602 units. 2. Interest expense on the bank note on December 1 has not yet been accrued.

3. Depreciation expense for the month is $4,500 for building and $3,500 for equipment.

4. Prepaid insurance of $600 expired in December. 5. Unearned revenue of $15,000 was earned during the month. 6. Amortization expense for the month $500. 7. Recorded bad debts expense based on the aging of accounts receivable, as follows:

Age of Accounts

130 Days

3160 Days

6190 Days

Over 90 Days

Accounts Receivable

$ 600,000

$ 500,000

$ 60,000

$ 40,000

Estimated percent uncollectible

0.3%

3%

30%

35%

Requirements:

1. Journalize and post normal monthly transactions to general ledger accounts in T accounts.

2. Prepare a trial balance as at December 31, 2020. (Hint: Assets first in order of liquidity).

3. Journalize and post adjusting entries in the same T accounts as requirement #1 above.

4. Prepare an adjusted trial balance as at December, 2020.

5. Generate income statement, statement of owners equity, and classified balance sheet for the year ended December 31, 2020. (Note: November 30, 2020 Trial Balance represents the accumulated revenue and expenses of the first 11 months in 2020. Tax rate: 0% - There is no tax expense).

6. Journalize and post closing entries in the same T accounts in requirement #1 above. 7. Prepare a post closing trial balance as at December, 2020.

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