Question
Hassellhouf Companys trial balance at December 31, 2017, is presented below. All 2017 transactions have been recorded except for the items described below. Debit Credit
Hassellhouf Companys trial balance at December 31, 2017, is presented below. All 2017 transactions have been recorded except for the items described below.
| Debit | Credit | ||
| Cash | $26,500 | ||
| Accounts Receivable | 37,000 | ||
| Notes Receivable | 9,100 | ||
| Interest Receivable | 0 | ||
| Inventory | 36,200 | ||
| Prepaid Insurance | 3,720 | ||
| Land | 20,300 | ||
| Buildings | 153,000 | ||
| Equipment | 70,000 | ||
| Patents | 9,500 | ||
| Allowance for Doubtful Accounts | $600 | ||
| Accumulated DepreciationBuildings | 51,000 | ||
| Accumulated DepreciationEquipment | 28,000 | ||
| Accounts Payable | 27,500 | ||
| Salaries and Wages Payable | 0 | ||
| Unearned Rent Revenue | 5,400 | ||
| Notes Payable (due in 2018) | 13,000 | ||
| Interest Payable | 0 | ||
| Notes Payable (due after 2018) | 35,500 | ||
| Common Stock | 53,000 | ||
| Retained Earnings | 59,620 | ||
| Dividends | 12,500 | ||
| Sales Revenue | 903,000 | ||
| Interest Revenue | 0 | ||
| Rent Revenue | 0 | ||
| Gain on Disposal of Plant Assets | 0 | ||
| Bad Debts Expense | 0 | ||
| Cost of Goods Sold | 637,000 | ||
| Depreciation Expense | 0 | ||
| Insurance Expense | 0 | ||
| Interest Expense | 0 | ||
| Other Operating Expenses | 61,800 | ||
| Amortization Expense | 0 | ||
| Salaries and Wages Expense | 100,000 | ||
| Total | $1,176,620 | $1,176,620 |
| 1. | On May 1, 2017, Hassellhouf purchased equipment for $17,400 plus sales taxes of $1,800 (all paid in cash). | |
| 2. | On July 1, 2017, Hassellhouf sold for $3,600 equipment which originally cost $5,100. Accumulated depreciation on this equipment at January 1, 2017, was $1,800; 2017 depreciation prior to the sale of the equipment was $500. | |
| 3. | On December 31, 2017, Hassellhouf sold on account $5,000 of inventory that cost $3,200. | |
| 4. | Hassellhouf estimates that uncollectible accounts receivable at year-end is $3,300. | |
| 5. | The note receivable is a one-year, 8% note dated April 1, 2017. No interest has been recorded. | |
| 6. | The balance in prepaid insurance represents payment of a $3,720 6-month premium on September 1, 2017. | |
| 7. | The building is being depreciated using the straight-line method over 30 years. The salvage value is $33,000. | |
| 8. | The equipment owned prior to this year is being depreciated using the straight-line method over 5 years. The salvage value is 10% of cost. | |
| 9. | The equipment purchased on May 1, 2017, is being depreciated using the straight-line method over 5 years, with a salvage value of $2,700. | |
| 10. | The patent was acquired on January 1, 2017, and has a useful life of 10 years from that date. | |
| 11. | Unpaid salaries and wages at December 31, 2017, total $2,200. | |
| 12. | The unearned rent revenue of $5,400 was received on December 1, 2017, for 3 months rent. | |
| 13. | Both the short-term and long-term notes payable are dated January 1, 2017, and carry a 9% interest rate. All interest is payable in the next 12 months.
Instructions (a) Prepare journal entries for the transactions listed above. (b) Prepare an updated December 31, 2014, trial balance. (c) Prepare a 2014 income statement and an owners equity statement. (d) Prepare a December 31, 2014, classified balancesheet. |
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