HUDSON CORPORATION Balance Sheet December 31, 2000 Cash $13,100 Accounts payable $ 8,750 Accounts receivable 29,780 Allowance for doubtful accounts (800) Common stock 30,000 Retained earnings 12,730 Inventory 9,400 $51,480 $51,480 During January 2021, the following transactions occurred. Hudson uses the perpetual inventor method. Jan. Hudson accepted a 4-month, 8% note from Betheny Company in payment of 1 Betheny's $1,200 account. 3 Hudson wrote off as uncollectible the accounts of Walter Corporation ($450) and Drake Company ($280). Hudson purchased $17,200 of inventory on account. Hudson sold products on account for $25,000 on account. 8 11 15 Hudson sold products to Jack Rice for $1,000 on account 17 Hudson collected $22,900 from customers on account. 21 Hudson paid $16,300 on accounts payable. 24 Hudson received payment in full ($280) from Drake Company on the account written off on January 3. 27 Hudson purchased advertising supplies for $1,400 cash. 31 Hudson paid other operating expenses, $3,218. Adjustment data: 1.Interest is recorded for the month on the note from January 1. 2.Bad debts are expected to be 6% of the January 31, 2017, accounts receivable. 3.A count of advertising supplies on January 31, 2017, reveals that $560 remains munused O 2.Bad debts are expected to be 6% of the January 31, 2017, accounts receivable. 3.A count of advertising supplies on January 31, 2017, reveals that $560 remains unused. 4.The income tax rate is 30%. (Hint: Prepare the income statement up to Income before taxes" and multiply by 30% to compute the amount; round to whole dollars.) Instructions (You may want to set up T-accounts to determine ending balances.) (a) Prepare journal entries for the transactions listed above and adjusting entries. (Include entries for cost of goods sold using the perpetual inventory system.) (b) Prepare an adjusted trial balance at January 31, 2017. (c) Prepare an income statement and a retained earnings statement for the month ending January 31, 2017, and a classified balance sheet as of January 31, 2017. HUDSON CORPORATION Balance Sheet December 31, 2000 Cash $13,100 Accounts payable $ 8,750 Accounts receivable 29,780 Allowance for doubtful accounts (800) Common stock 30,000 Retained earnings 12,730 Inventory 9,400 $51,480 $51,480 During January 2021, the following transactions occurred. Hudson uses the perpetual inventor method. Jan. Hudson accepted a 4-month, 8% note from Betheny Company in payment of 1 Betheny's $1,200 account. 3 Hudson wrote off as uncollectible the accounts of Walter Corporation ($450) and Drake Company ($280). Hudson purchased $17,200 of inventory on account. Hudson sold products on account for $25,000 on account. 8 11 15 Hudson sold products to Jack Rice for $1,000 on account 17 Hudson collected $22,900 from customers on account. 21 Hudson paid $16,300 on accounts payable. 24 Hudson received payment in full ($280) from Drake Company on the account written off on January 3. 27 Hudson purchased advertising supplies for $1,400 cash. 31 Hudson paid other operating expenses, $3,218. Adjustment data: 1.Interest is recorded for the month on the note from January 1. 2.Bad debts are expected to be 6% of the January 31, 2017, accounts receivable. 3.A count of advertising supplies on January 31, 2017, reveals that $560 remains munused O 2.Bad debts are expected to be 6% of the January 31, 2017, accounts receivable. 3.A count of advertising supplies on January 31, 2017, reveals that $560 remains unused. 4.The income tax rate is 30%. (Hint: Prepare the income statement up to Income before taxes" and multiply by 30% to compute the amount; round to whole dollars.) Instructions (You may want to set up T-accounts to determine ending balances.) (a) Prepare journal entries for the transactions listed above and adjusting entries. (Include entries for cost of goods sold using the perpetual inventory system.) (b) Prepare an adjusted trial balance at January 31, 2017. (c) Prepare an income statement and a retained earnings statement for the month ending January 31, 2017, and a classified balance sheet as of January 31, 2017
