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Grouper Corp. prepares quarterly financial statements. The post-closing trial balance at December 31, 2021, is presented below. GROUPER CORP. Post-Closing Trial Balance December 31, 2021
Grouper Corp. prepares quarterly financial statements. The post-closing trial balance at December 31, 2021, is presented below. GROUPER CORP. Post-Closing Trial Balance December 31, 2021 Debit Credit Cash $22,000 Accounts Receivable 22,000 Allowance for Doubtful Accounts $1,200 Equipment 16,000 Accumulated Depreciation-Equipment 11,000 Buildings 124,000 Accumulated Depreciation-Buildings 11,000 Land 20,000 Accounts Payable 12,170 Common Stock 90,000 Retained Earnings 78,630 $204,000 $204,000 During the first quarter of 2022, the following transactions occurred: 1. On February 1, Grouper collected fees of $9,600 in advance. The company will perform $800 of services each month from February 1, 2022, to January 31, 2018. 2. On February 1, Grouper purchased computer equipment for $8,400 plus sales taxes of $600. $2,800 cash was paid with the rest on account. Check #455 was used. 3. On March 1, Grouper acquired a patent with a 10-year life for $9,000 cash. Check #456 was used. 4. On March 28, Grouper recorded the quarter's sales in a single entry. During this period, Grouper had total sales of $190,000 (not including the sales referred to in item 1 above). All of the sales were on account. 5. On March 29, Grouper collected $183,000 from customers on account. 6. On March 29, Grouper paid $16,170 on accounts payable. Check #457 was used. 7. On March 29, Grouper paid other operating expenses of $98,000. Check #458 was used. 8. On March 31, Grouper wrote off a receivable of $300 for a customer who declared bankruptcy. 9. On March 31, Grouper sold for $1,770 equipment that originally cost $12,000. It had an estimated life of 5 years and salvage of $1,000. Accumulated depreciation as of December 31, 2021, was $8,800 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, 2021, bank reconciliation is: Deposit in transit: 12/30/2021 $5,000 Outstanding checks #440 3,200 500 #453 800 #454 5,890 #452 The bank statement received for the quarter ended March 31, 2022, is as follows: Beginning balance per bank $27,390 Deposits: 1/2/2022, $5,000; 2/2/2022, $9,600; 3/30/2022, $183,000 197,600 Checks: #452, $500; #453, $800; #457, $16,170; #458, $98,000 (115,470) Debit memo: Bank service charge (record as operating expense) (100) Ending bank balance $109,420 2. Record revenue earned from item 1 above. 3. $22,600 of accounts receivable at March 31, 2022, 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 24.00%. 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, 2022. The new equipment purchased in February is being depreciated on a straight-line basis over 5 years and salvage value was estimated at $900. 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 $ 16,000. 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.) Prepare a bank reconciliation in good form. (List items that increase balance as per bank first.) Grouper Corp. Bank Reconciliation 3/31/22 Balance Per Bank 109420 Add 4) : Deposits in Transit Deposits in Transit [ 1770 1770 Outstanding Checks #440 #440 C 3200 3200 i #455 2800 i #456 4 9000 #454 5890 i 20890 i Adjusted Balance Per Bank 4 90300 Adjusted Balance Per Bank - 90300 Balance Per Books 90400 Less 4: Bank Service Charge 2 100 i Adjusted Balance Per Books 90300 Journalize entries related to bank reconciliation and all adjusting entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts. Round answers to 0 decimal places, e.g. 5,275.) No. Date Account Titles and Explanation Debit Credit 1. 3/31/2022 Other Operating Expenses 100 Cash 100 2. 3/31/2022 Unearned Service Revenue 1000 Service Revenue 1000 3. 3/31/2022 Bad Debt Expense Allowance for Doubtful Accounts 4. 3/31/2022 Depreciation Expense Accumulated Depreciation-Equipment 5. 3/31/2022 Depreciation Expense 3600 Accumulated Depreciation-Buildings 3600 6. 3/31/2022 Amortization Expense Amortization Expense C Patents 7. 3/31/2022 Income Tax Expense 30000 Income Taxes Payable Income Taxes Payable 30000
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