I have this comprehensive project that my professor put information in from jan-nov and I have to complete it for December, I have worked in it myself and am off on my balance, she included everything in this packet that is necessary to complete it from journal entries to closing entries. I already did the journal entries so I don't need that but if you could take a look at this and let me know if you could maybe complete it that would help me out big time. Thank you for any help you can give me...Eric

ACC 201 - INTERMEDIATE ACCOUNTING I COMPREHENSIVE FINAL PROJECT - FALL 2016 BAY YACHT CORPORATION - GENERAL INFORMATION The Bay Yacht Corporation is a publicly-traded corporation that was formed on January 1. 2012. The following assumptions were utilized in this problem: 1. The Corporation uses accrual basis accounting. 2. All numbers (except Earnings per Share numbers) are rounded to the nearest whole dollar. 3. Prepaid expenses and unearned revenues are initially recorded in balance sheet accounts. 4. Reversing entries are made for required accruals on the first day of the new year. Adjusting entries are only made once a year on December 31. 5. All sales are made on account, and all sales are subject to a sales tax rate of 8%. 6. Sales are recorded at the Gross Method and a 2% discount is given if the receivable is paid within 10 days. 7. The Corporation uses a perpetual inventory system to track inventory. 8. Inventory purchases are recorded using the gross method. 9. The gross profit on selling price is 60% which means cost of goods sold is 40% of the selling price. 10. The Corporation uses straight-line depreciation. The following depreciation schedule is provided to assist in this problem. Assume that the Corporation takes a full year of depreciation in the year of acquisition and no depreciation in the year of disposal. Also, salvage value is zero on all fixed assets. Fixed Asset Name Land Buildings: Sales Buildings: Admin. Equipment: Sales* Office Equipment Equipment: Sales Equipment: Sales* Totals Purchase Date 1/1/2012 1/1/2012 1/1/2012 1/1/2012 1/1/2012 12/14/2016 12/16/2016 Service 12/31/2015 2016 Life Accumulated Depreciation Cost (years) Depreciation Expense 7,980,000 N/A 15,600,000 39 1,600,000 400,000 6,240,000 39 640,000 160,000 5,460,000 5 4,368,000 1,092,000 1,365,000 7 780,000 195,000 15,000,000 5 3,000,000 (400,000) 5 (320,000) (80,000) 51,245,000 7,068,000 4,767,000 12/31/2016 Accumulated Depreciation 2,000,000 800,000 5,460,000 975,000 3,000,000 (400,000) 11,835,000 * A portion of this equipment was sold in 2016 and is adjusted in the above schedule on December 16, 2016. 11. The Corporation uses straight-line amortization on appropriate intangible assets. The following schedule is provided to assist in this problem. Assume that a full year of amortization is taken in the year of acquisition and no amortization is taken in the year of disposal. Intangible Asset Name Goodwill Copyright Purchase Date 1/1/2012 1/1/2012 Totals Cost 95,000 1,000,000 Service Life (years) 12/31/2015 2016 Accumulated Amortization Amortization Expense 0 10 400,000 100,000 1,095,000 400,000 WS 1 - 1 12/31/2016 Accumulated Amortization 100,000 500,000 500,000 12. Assume all payables are paid on appropriate dates. 13. Vendors offer a 2% discount on all purchases paid within 10 days. 14. Sales tax payable are remitted quarterly to the State Department of Taxation and Finance. The following schedule details the information and the remittance dates for the quarter. Note: the sales for December 2015 were $1,000,000 and the appropriate amount of sales tax was in the Sales Tax Payable account at year-end. Quarter 1 Quarter 2 Quarter 3 Quarter 4 Month Dec. 2015 Mar. 2016 June 2016 Sept. 2016 Month Jan. 2016 Apr. 2016 July 2016 Oct. 2016 Month Feb. 2016 May 2016 Aug. 2016 Nov. 2016 Due Date March 20, 2016 June 20, 2016 Sept. 20, 2016 Dec. 20, 2016 15. Payroll is paid bi-weekly with the pay period ending on Fridays. Electronic transfers are required to be made on the date the payroll for the following items: federal withholding, state withholding, social security, Medicare, and state unemployment tax (SUTA). The federal unemployment tax is paid once a year on January 31 for the previous year. Note: December 31, 2015, landed on a Friday. Therefore, the payroll and related liabilities were recorded and paid to employees and the appropriate agencies as of that date. This explains the zero balances in the wages and salaries payable accounts and the related payroll liabilities. Note: December 31, 2016, falls on a Monday. 16. Payroll tables are located in Worksheet 6 (WS6). The tables detail the number of employees and pertinent information such as rates and bases for computing payroll. 17. The Note Payable is a 14 month note which was issued on October 1, 2015, at a stated interest rate of 8%. 18. The Interest Payable account reflected the accrued interest on the Note Payable as of year-end 2015. 19. The Corporation sells extended warranty agreements. These monies go into the Unearned Revenue: Extended Warranties account until the warranty expires or until the company has to provide service for the warranty. 20. The Corporation uses the expense warranty approach, accrual basis, to accrue estimated warranty costs. These estimated amounts are recorded in the Estimated Liability under Warranties account until warranty work is completed. 21. Quarterly income tax payments are made to the appropriate agencies throughout the year. The quarter ending December 31 will require an adjusting entry to accrue the amount of income tax expense which has not been paid to date. WS 1 - 2 22. The $40,000,000, 10%, Bond Payable was issued on June 30, 2015. The bond pays interest semi-annually on June 30 and December 31. The market rate of interest is 12%. The Corporation amortizes the Discount on the Bonds Payable using the effective-interest method. The following table provides information regarding the bond. Date Issued - 06/30/2015 12/31/2015 6/30/2016 12/31/2016 Cash Paid 2,000,000 2,000,000 2,000,000 Bond Interest Expense 2,124,710 2,132,193 2,140,125 Discount Amortized 124,710 132,193 140,125 Unamortized Discount 4,588,160 4,463,450 4,331,257 4,191,132 Carrying Value of Bonds 35,411,840 35,536,550 35,668,743 35,808,868 23. The Corporation is authorized to issue 100,000 shares of 6%, 100 par, non-cumulative, non-participating, non-convertible Preferred Stock. 24. The Corporation is authorized to issue 1,000,000 shares of $10 par value Common Stock. 25. The Corporation purchased 5,000 shares of its Common Stock and put it in its Treasury Stock account. The purchase was made in 2013 at $20 per share. 26. The Unrealized Holding Gain or Loss: Equity account was a result of the securities fair value adjustment for the Available-for-Sale Securities account for the year-end 2015. Corporate management intends to hold these securities for an indefinite period of time. 27. All dividends are taken directly out of the Retained Earnings account when declared. BAY YACHT CORPORATION - JANUARY 1 - NOVEMBER 30, 2016, INFORMATION The journal contains summary journal entries which occurred from January 1 - November 30, 2016. These entries have been posted to the appropriate general ledger accounts. Hint, it would be helpful to review these entries before working on the journal entries for December 2016. The Journal can be found in Worksheet 2 (WS2), and the General Ledger Accounts can be found in Worksheet 3 (WS3). Moreover, payroll information can be found in Worksheet 6 (WS6). BAY YACHT CORPORATION - DECEMBER 2016 INFORMATION Record the following transactions in the Journal located in Worksheet 2 (WS2) - a special section has been set up for December 2016 journal entries. 1. On December 1, 2016, the Corporation reissued 2,000 shares of its Treasury Stock for $30 per share. 2. The Note Payable that was issued on October 1, 2015, reaches it maturity on December 1, 2016. Record the payment of the note and the related interest. Hint, interest had been accrued on the note at December 31, 2015. WS 1 - 3 3. The Corporation declared a cash dividend on December 1, 2016, to stockholders of record on December 15, 2016. The cash dividend will be paid on December 31, 2016. The total cash dividend declared was $820,000. Determine the amount which will be owed to the preferred stockholders and the common stockholders. Note: the dividend is deducted directly from the Retained Earnings account. 4. The utility bill for November was received and paid on December 5, 2016. The total bill was $3,500 with $2,000 for Administrative and $1,500 for Sales. 5. The Corporation sold a yacht for $2,000,000 plus sales tax on account on December 6, 2016. The cost of the yacht was 40% of the selling price (not including sales tax). Remember, the Corporation uses a perpetual inventory system. 6. On December 12, 2016, the Corporation received payment of $3,153,600 of account. This payment was made within the discount period, and the check was for the correct amount after deducting the discount. 7. The Corporation received notification that one of its Account Receivable customers has filed for bankruptcy, so they wrote off $5,000 on the account on December 13, 2016. 8. The Corporation purchased $6,603,000 of inventory on account on December 13, 2016. 9. Several items were returned for warranty work on December 14, 2016. The Corporation used $24,000 of inventory to complete the repairs, and they refunded $6,000 to dissatisfied customers. 10. The Corporation was having a very good year and decided to invest in $15,000,000 of new sales equipment. They paid cash for the equipment on December 14, 2016. Note: the equipment has already been added to the above Depreciation Schedule. 11. On December 14, 2016, the Corporation accrued and paid its bi-weekly payroll. See Worksheet 6 (WS6) for the payroll information. All of the payroll numbers have been computed to prepare the journal entries to record the gross payroll and related payroll tax. Refer to General Information: Item 15 (above) for additional information. There will be five journal entries to record and pay the payroll and related items. 12. On December 16, 2016, the Corporation sold $400,000 of Equipment: Sales for $150,000. The equipment was 80% depreciated. The reduction in equipment has already been put on the above Depreciation Schedule. Record the journal entry to record the sale and remove the equipment from the books. 13. The Corporation paid its quarterly sales tax on December 20, 2016. Refer to Sales Tax Payable account in the General Ledger to see the amount owed for September, October, and November of 2016. The amount should not include monies collected for sales tax in December. 14. On December 28, 2016, the Corporation accrued and paid its bi-weekly payroll. See Worksheet 6 (WS6) for the payroll information. All of the payroll numbers have been computed to prepare the journal entries to record the gross payroll and related payroll tax. Refer to General Information: Item 15 (above) for additional information. There will be five journal entries to record and pay the payroll and related items. 15. The Corporation paid the December 31, 2016, bond interest payment. See the above Amortization Schedule to assist you in preparing this entry. Note: General Information - Item 22 contains the information regarding the Bond Payable. 16. The Corporation paid the cash dividend on December 31, 2016, which had been declared on December 1, 2016. WS 1 - 4 17. The Corporation transferred $200,000 of Cash from its checking account to its savings account on December 31, 2016. 18. The Corporation determined $140,000 of the Unearned Revenue: Extended Warranties has been earned as of December 31, 2016. Due to immateriality, the amount is recorded in the Sales account. 19. The Corporation issued $20,000,000, 10%, 10-year debenture bonds on December 31, 2016, when the market (effective) rate of interest was 8%. The bonds will pay interest semi-annually on June 30 and December 31. The monies will be used to expand the business. BAY YACHT CORPORATION - YEAR-END DECEMBER 2016 ADJUSTING ENTRIES INFORMATION Hint: Journalize and post all of December transactions to update the accounts before working on the adjusting entries. This will ensure that the accounts have been updated before starting the adjusting entries. Also, prepare the trial balance on the worksheet, to ensure debits equal credits, before doing the adjusting entries. Record the following adjusting entries in the Journal located in Worksheet 2 (WS2) - a special section has been set up for adjusting entries. Date all adjusting entries December 31, 2016. 1. The Corporation estimates bad debts expense to be .1% (.001) of net sales. 2. A $4,000 utility bill was received for December. Of the total, $2,200 was for Administrative and $1,800 was for Sales. Record this liability in the Accounts Payable account. 3. Accrue one day of payroll including the gross pay and the related items. See Worksheet 6 (WS6) for the payroll information. All of the payroll numbers have been computed to prepare the journal entries to record the gross payroll and related payroll tax. Refer to General Information: Item 15 (above) for additional information. There will be two journal entries to record the accrued payroll and related items. 4. The Corporation used up one-half of the amounts in the Prepaid Insurance: Sales and Prepaid Insurance: Administrative accounts. 5. The Corporation determined the estimated liability for warranties to be 1% (.01) of net sales for the year. 6. Record the depreciation expense for administrative and sales fixed assets. Refer to the above Depreciation Schedule. 7. Record the amortization expense for the intangible assets where appropriate. Refer to the above Amortization Schedule. 8. The Corporation took physical inventories for Office Supplies: Administrative and Supplies: Sales. They determined that the ending inventory for Office Supplies: Administrative was $2,860 and $4,870 for Supplies: Sales. Record the amount of supplies used up for the year. 9. The fair market value for the Available-for-Sale Securities increased by $10,000 for the year. 10. The Corporation determined it would need to accrue another $2,250,000 for income tax expense for the year. WS 1 - 5 BAY YACHT CORPORATION - DECEMBER 31, 2016, FINANCIAL STATEMENTS INFORMATION Prepare the following financial statements for Bay Yacht Corporation for the year-ended December 31, 2016, in Worksheet 7 (WS7). The working papers for the financial statements are formatted. Utilize examples from the textbook and in-class notes to prepare the financial statements in a professional manner. Worksheet 5 (WS5) contains additional information to be used in preparing the financial statements. 1. Multiple-step Income Statement (including the appropriate Earnings per Share numbers). Note: the Payroll Tax Expense can be included under Administrative Expenses based on materiality. 2. Comprehensive Income Statement 3. Statement of Retained Earnings 4. Classified Balance Sheet (including the required disclosures). Show the carrying value of each bond separately. BAY YACHT CORPORATION - YEAR-END DECEMBER 2016 CLOSING ENTRIES INFORMATION Hint: Journalize and post all adjusting entries to update the accounts before working on the closing entries. This will ensure the accounts have been updated before starting the closing entries. Also, prepare the adjusted trial balance and complete the worksheet to ensure the net income on the worksheet matches the net income on the Income Statement and the amount being closed to the Retained Earnings account. Record the closing entries in the Journal located in Worksheet 2 (WS2) - a special section has been set up for the closing entries. In fact, all of the temporary accounts have been set up as closing entries. Fill in the ending balances from the General Ledger accounts to complete the closing process. Remember to post closing entries to the General Ledger accounts which will close all temporary accounts and update the Retained Earnings account. Accounts will zero balances can be left blank for the dollar amount and the posting reference. Do not delete unused accounts. Remember to note adjusting and closing entries in the Explanation section in the general ledger accounts when posting. WS 1 - 6 ACC 201 - INTERMEDIATE ACCOUNTING COMPREHENSIVE PROBLEM BAY YACHT CORPORATION WS 2 - 1 ACCOUNT NUMBER 1001 1002 1003 1004 1005 1006 1007 1008 1009 1010 1050 1051 1052 1100 1200 1210 1211 1220 1221 1230 1231 1240 1241 1320 1330 1340 1500 2001 2010 2011 2020 2030 2040 2050 2060 2064 2065 2066 2067 CHART OF ACCOUNTS ACCOUNT NAME Cash - Checking Accounts Cash - Savings Accounts Accounts Receivable Allowance for Doubtful Accounts Notes Receivable Inventory Office Supplies: Administrative Supplies: Sales Prepaid Insurance: Sales Prepaid Insurance: Administrative Trading Securities Available-for-Sale Securities Securities Fair Value Adjustment (Available-for-Sale) Held-to-Maturity Securities Land Buildings: Sales Accumulated Depreciation: Sales Buildings Buildings: Administrative Accumulated Depreciation: Administrative Buildings Equipment: Sales Accumulated Depreciation: Sales Equipment Office Equipment Accumulated Depreciation: Office Equipment Goodwill Trademark Copyright Unamortized Bond Issue Costs Accounts Payable Notes Payable Discount on Notes Payable Unearned Revenue: Extended Warranties Interest Payable Bond Interest Payable Estimated Liability under Warranties Wages and Salaries Payable Federal Withholding Payable State Withholding Payable Social Security Payable Medicare Payable POST-CLOSING TRIAL BALANCE December 31, 2015 Debit Credit 890,700 936,714 3,353,600 24,500 0 27,897,000 5,780 17,860 240,000 120,000 0 650,000 14,500 0 7,980,000 15,600,000 1,600,000 6,240,000 640,000 5,460,000 4,368,000 1,365,000 780,000 95,000 0 600,000 0 465,000 50,000 0 140,000 1,000 0 175,000 0 0 0 0 0 2068 2069 Federal Unemployment Tax Payable State Unemployment Tax Payable CHART OF ACCOUNTS (Continued) ACCOUNT ACCOUNT NUMBER NAME 2070 Dividends Payable: Preferred Stock 2071 Dividends Payable: Common Stock 2072 Income Tax Payable 2073 Sales Tax Payable 2500 Bond Payable 2510 Premium on Bonds Payable 2520 Discount on Bonds Payable 2600 Mortgage Payable 3001 Preferred Stock 3010 Common Stock 3020 Common Stock Dividend Distributable 3101 Paid-in-Capital in Excess of Par: Preferred Stock 3110 Paid-in-Capital in Excess of Par: Common Stock 3120 Paid-in-Capital from Treasury Stock 3130 Paid-in-Capital from Stock Warrants 3140 Treasury Stock 3500 Retained Earnings 3600 Income Summary 3800 Unrealized Holding Gain or Loss: Equity 4000 Sales 4001 Sales Returns and Allowances 4002 Sales Discounts 4100 Interest Revenue 4200 Dividend Revenue 4300 Gain on Transaction 5000 Cost of Goods Sold 5100 Advertising Expense 5110 Amortization Expense 5120 Bad Debts Expense 5130 Bond Interest Expense 5140 Bond Issue Expense 5150 Depreciation Expense: Administrative 5160 Depreciation Expense: Sales 5170 Freight and Transportation-out Expense 5180 Insurance Expense: Administrative 5190 Insurance Expense: Sales 5200 Interest Expense 5210 Income Tax Expense 5220 Legal and Professional Expense: Administrative 5230 Office Supplies Expense: Administrative 5235 Payroll Tax Expense 5240 Property Tax Expense: Administrative 5250 Property Tax Expense: Sales 5260 Rent Expense: Administrative 5270 Rent Expense: Sales 2,072 0 POST-CLOSING TRIAL BALANCE Debit Credit 0 0 200,000 80,000 40,000,000 4,463,450 0 2,000,000 8,000,000 0 760,000 11,200,000 0 0 100,000 5,529,532 0 14,500 5280 5290 5300 Research and Development Expense Salaries Expense: Administrative Salaries Expense: Sales WS 2 - 2 POST-CLOSING TRIAL BALANCE CHART OF ACCOUNTS (Continued) ACCOUNT ACCOUNT NUMBER NAME 5310 Supplies Expense: Sales 5320 Utilities Expense: Administrative 5330 Utilities Expense: Sales 5340 Wages Expense: Administrative 5350 Wages Expense: Sales 5360 Warranty Expense 5500 Loss on Impairment 5510 Loss on Transaction TOTALS GENERAL JOURNAL Date Account Titles and Explanation 1/21/2016 Federal Unemployment Tax Payable Cash - Checking Accounts Ref - J585 2068 1001 Debit Credit 76,029,604 76,029,604 Debit Credit 2,072 2,072 1/1/16Cash - Checking Accounts 11/30/2016 Sales Discounts Accounts Receivable 1001 4002 1003 3,090,528 63,072 1/1/16Allowance for Doubtful Accounts 11/30/2016 Accounts Receivable 1004 1003 15,000 1/1/16Accounts Receivable 11/30/2016 Sales Sales Tax Payable 1003 4000 2073 62,640,000 1/1/16Cost of Goods Sold 11/30/2016 Inventory 5000 1006 23,200,000 1/1/16Cash - Checking Accounts 11/30/2016 Sales Discounts Accounts Receivable 1001 4002 1003 53,998,000 1,102,000 1/1/16Inventory 11/30/2016 Cash - Checking Accounts 1006 1001 25,000,000 1/1/16Cash - Checking Accounts 11/30/2016 Unearned Warranty Revenue 1001 2020 1,160,000 3,153,600 15,000 58,000,000 4,640,000 23,200,000 55,100,000 25,000,000 1,160,000 1/1/16Utilities Expense: Administrative 11/30/2016 Utilities Expense: Sales Cash - Checking Accounts 5320 5330 1001 22,000 16,500 1/1/16Prepaid Insurance: Sales 11/30/2016 Prepaid Insurance: Administrative Cash - Checking Accounts 1009 1010 1001 200,000 100,000 1/1/16Office Supplies: Administrative 11/30/2016 Supplies: Sales Cash - Checking Accounts 1007 1008 1001 2,200 5,260 1/1/16Sales Returns and Allowances 11/30/2016 Accounts Receivable 4001 1003 35,000 1/1/16Inventory 11/30/2016 Cost of Goods Sold 1006 5000 14,000 1/1/16Accounts Payable 11/30/2016 Cash - Checking Accounts 2001 1001 465,000 1/1/16Estimated Liability under Warranties 11/30/2016 Inventory Cash - Checking Accounts 2050 1006 1001 120,000 1/1/16Salaries Expense: Administrative 11/30/2016 Salaries Expense: Sales Wages Expense: Administrative Wages Expense: Sales Federal Withholding Payable State Withholding Payable Social Security Payable Medicare Payable Wages and Salaries Payable 5290 5300 5340 5350 2064 2065 2066 2067 2060 1,680,000 192,000 720,000 768,000 1/1/16Wages and Salaries Payable 11/30/2016 Cash - Checking Accounts 2060 1001 2,420,120 1/1/16Federal Withholding Payable 11/30/2016 State Withholding Payable Social Security Payable Medicare Payable Cash - Checking Accounts 2064 2065 2066 2067 1001 504,000 252,000 135,160 48,720 1/1/16Payroll Tax Expense 11/30/2016 Social Security Payable Medicare Payable Federal Unemployment Tax Payable State Unemployment Tax Payable 5235 2066 2067 2068 2069 198,720 38,500 WS 2 - 3 300,000 7,460 35,000 14,000 465,000 85,000 35,000 504,000 252,000 135,160 48,720 2,420,120 2,420,120 939,880 135,160 48,720 2,240 12,600 1/1/16Social Security Payable 11/30/2016 Medicare Payable State Unemployment Tax Payable Cash - Checking Accounts 2066 2067 2069 1001 135,160 48,720 12,600 1/1/16Legal and Professional Expense: Administrative 11/30/2016 Cash - Checking Accounts 5220 1001 165,000 1/1/16Bond Interest Expense 11/30/2016 Cash - Checking Accounts Discount on Bonds Payable 5130 1001 2520 2,132,193 1/1/16Insurance Expense: Administrative 11/30/2016 Insurance Expense: Sales Prepaid Insurance: Sales Prepaid Insurance: Administrative 5180 5190 1009 1010 120,000 240,000 1/1/16Income Tax Payable 11/30/2016 Cash - Checking Accounts 2072 1001 200,000 1/1/16Property Tax Expense: Administrative 11/30/2016 Property Tax Expense: Sales Cash - Checking Accounts 5240 5250 1001 200,000 350,000 1/1/16Sales Tax Payable 11/30/2016 Cash - Checking Accounts 2073 1001 3,600,000 1/1/16Income Tax Expense 11/30/2016 Income Tax Payable 5200 2072 750,000 1/1/16Advertising Expense 11/30/2016 Accounts Payable 5100 2001 5,000,000 1/1/16Freight and Transportation-out Expense 11/30/2016 Cash - Checking Accounts 5170 1001 3,500,000 196,480 WS 2 - 4 165,000 2,000,000 132,193 240,000 120,000 200,000 550,000 3,600,000 750,000 5,000,000 3,500,000 Date 12/1/2016 Cash December 2016 Entries Treasury Stock Paid-in Capital from Treasury Stock Ref - J586 1001 3140 3120 Debit 60,000 WS 2 - 5 Credit 40,000 20,000 12/1/2016 Notes Payable Interest Payable Cash 2010 2030 1001 50,000 4,000 12/1/2016 Retained Earnings Dividends Payable: Preferred Stock Dividends Payable: Common Stock 3500 2070 2071 820,000 12/5/2016 Utilities Expense: Administrative Utilities Expense: Sales Cash - Checking Accounts 5320 5330 1001 2,000 1,500 12/6/2016 Accounts Receivable Sales Sales Tax Payable 1003 4000 2073 2,160,000 12/6/2016 Cost of Goods Sold Inventory 5000 1006 800,000 12/12/2016 Cash - Checking Accounts Sales Discounts Accounts Receivable 1001 4002 1003 3,090,528 63,072 12/13/2016 Allowance for Doubtful Accounts Accounts Receivable 1004 1003 5,000 12/13/2016 Inventory Accounts Payable 1006 2001 6,603,000 12/14/2016 Estimated Liability under Warranties Inventory Cash - Checking Accounts 2050 1006 1001 30,000 12/14/2016 Equipment: Sales Cash - Checking Accounts 1230 1001 15,000,000 54,000 600,000 220,000 3,500 2,000,000 160,000 800,000 3,153,600 5,000 6,603,000 24,000 6,000 15,000,000 12/14/2016 Salaries Expense: Administrative Salaries Expense: Sales Wages Expense: Administrative Wages Expense: Sales Federal Withholding Payable State Withholding Payable Social Security Payable Medicare Payable Wages and Salaries Payable 5290 5300 5340 5350 2064 2065 2066 2067 2060 70,000 8,000 30,000 32,000 12/14/2016 Wages and Salaries Payable Cash - Checking Accounts 2060 1001 102,130 12/14/2016 Federal Withholding Payable State Withholding Payable Social Security Payable Medicare Payable Cash - Checking Accounts 2064 2065 2066 2067 1001 21,000 10,500 4,340 2,030 12/14/2016 Payroll Tax Expense Social Security Payable Medicare Payable 5235 2066 2067 6,370 12/14/2016 Social Security Payable Medicare Payable Cash - Checking Accounts 2066 2067 1001 4,340 2,030 12/16/2016 Cash - Checking Accounts Accumulated Depreciation: Sales Equipment Loss on Transaction Equipment: Sales 1001 1231 5510 1230 150,000 80,000 170,000 12/20/2016 Sales Tax Payable Cash - Checking Accounts 2073 1001 1,040,000 12/28/2016 Salaries Expense: Administrative Salaries Expense: Sales Wages Expense: Administrative Wages Expense: Sales Federal Withholding Payable State Withholding Payable Social Security Payable Medicare Payable Wages and Salaries Payable 5290 5300 5340 5350 2064 2065 2066 2067 2060 70,000 8,000 30,000 32,000 12/28/2016 Wages and Salaries Payable Cash - Checking Accounts 2060 1001 102,130 12/28/2016 Federal Withholding Payable State Withholding Payable 2064 2065 21,000 10,500 21,000 10,500 4,340 2,030 102,130 WS 2 - 6 102,130 37,870 4,340 2,030 6,370 400,000 1,040,000 21,000 10,500 4,340 2,030 102,130 102,130 Social Security Payable Medicare Payable Cash - Checking Accounts 2066 2067 1001 4,340 2,030 12/28/2016 Payroll Tax Expense Social Security Payable Medicare Payable 5235 2066 2067 6,370 12/28/2016 Social Security Payable Medicare Payable Cash - Checking Accounts 2066 2067 1001 4,340 2,030 12/31/2016 Bond Interest Expense Cash - Checking Accounts Discount on Bonds Payable 5130 1001 2520 2,140,125 12/31/2016 Retained Earnings Dividends Payable: Preferred Stock Dividends Payable: Common Stock 3500 2070 2071 820,000 12/31/2016 Cash - Savings Accounts Cash - Checking Accounts 1002 1001 200,000 12/31/2016 Unearned Revenue: Extended Warranties Sales 2020 4000 140,000 12/31/2016 Cash - Checking Accounts Bond Payable Premium on Bonds Payable 1001 2500 2510 21,600,000 12/31/2016 Salaries Expense: Administrative Salaries Expense: Sales Wages Expense: Administrative Wages Expense: Sales Federal Withholding Payable State Withholding Payable Social Security Payable Medicare Payable Wages and Salaries Payable 5290 5300 5340 5350 2064 2065 2066 2067 2060 7,000 800 3,000 3,200 12/31/2016 Wages and Salaries Payable Cash - Checking Accounts 2060 1001 10,213 Federal Withholding Payable State Withholding Payable Social Security Payable Medicare Payable Cash - Checking Accounts 2064 2065 2066 2067 1001 2,100 1,050 434 203 5235 637 12/31/2016 Payroll Tax Expense 37,870 4,340 2,030 WS 2 - 7 6,370 2,000,000 140,125 600,000 220,000 200,000 140,000 20,000,000 1,600,000 2,100 1,050 434 203 10,213 10,213 3,787 Social Security Payable Medicare Payable 12/31/2016 Social Security Payable Medicare Payable Cash - Checking Accounts Date Adjusting Entries, December 31, 2016 2066 2067 434 203 2066 2067 1001 Ref - J587 434 203 637 Debit WS 2 - 8 Credit Date Closing Entries, December 31, 2016 12/31/2016 Sales Interest Revenue Dividend Revenue Gain on Transaction Income Summary 12/31/2016 Income Summary Sales Returns and Allowances Sales Discounts Cost of Goods Sold Advertising Expense Amortization Expense Bad Debts Expense Bond Interest Expense Bond Issue Expense Depreciation Expense: Administrative Depreciation Expense: Sales Freight and Transportation-out Expense Insurance Expense: Administrative Insurance Expense: Sales Interest Expense Income Tax Expense Legal and Professional Expense: Administrative Office Supplies Expense: Administrative Payroll Tax Expense Property Tax Expense: Administrative Property Tax Expense: Sales Rent Expense: Administrative Rent Expense: Sales Research and Development Expense Salaries Expense: Administrative Salaries Expense: Sales Supplies Expense: Sales Utilities Expense: Administrative Utilities Expense: Sales Wages Expense: Administrative Wages Expense: Sales Warranty Expense Ref - J588 Debit WS 2 - 9 Credit Loss on Impairment Loss on Transaction 12/31/2016 Income Summary Retained Earnings WS 2 - 10 BAY YACHT CORPORATION - GENERAL LEDGER Date 12/31/2015 Balance 1/21/2016 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 12/1/2016 12/1/2016 12/5/2016 12/12/2016 12/14/2016 12/14/2016 12/14/2016 12/14/2016 12/14/2016 12/16/2016 12/20/2016 12/28/2016 12/28/2016 12/28/2016 12/31/2016 12/31/2016 12/31/2016 12/31/2016 12/31/2016 12/31/2016 GENERAL LEDGER Cash - Checking Accounts Explanation Ref. J585 J585 J585 J585 J585 J585 J585 J585 J585 J585 J585 J585 J585 J585 J585 J585 J585 J585 J585 J586 J586 J586 J586 J586 J586 J586 J586 J586 J586 J586 J586 J586 J586 J586 J586 J586 J586 J586 J586 Debit No. Credit 2,072 3,090,528 53,998,000 25,000,000 1,160,000 38,500 300,000 7,460 35,000 2,420,120 939,880 196,480 165,000 2,000,000 200,000 550,000 465,000 3,500,000 3,600,000 60,000 54,000 3,500 3,090,528 6,000 15,000,000 102,130 37,870 6,370 150,000 1,040,000 102,130 37,870 6,370 2,000,000 200,000 21,600,000 10,213 3,787 637 1001 Balance 890,700 888,628 3,979,156 57,977,156 32,977,156 34,137,156 34,098,656 33,798,656 33,791,196 33,756,196 31,336,076 30,396,196 30,199,716 30,034,716 28,034,716 27,834,716 27,284,716 26,819,716 23,319,716 19,719,716 19,779,716 19,725,716 19,722,216 22,812,744 22,806,744 7,806,744 7,704,614 7,666,744 7,660,374 7,810,374 6,770,374 6,668,244 6,630,374 6,624,004 4,624,004 4,424,004 26,024,004 26,013,791 26,010,004 26,009,367 Date 12/31/2015 12/31/2016 Cash - Savings Accounts Explanation Ref. Balance J586 Date 12/31/2015 Balance 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 12/6/2016 12/12/2016 12/13/2016 Accounts Receivable Explanation Ref. J585 J585 J585 J585 J585 J586 J586 J586 Allowance for Doubtful Accounts Date Explanation Ref. 12/31/2015 Balance 1/1-11/30/16 J585 12/13/2016 J586 Date 12/31/2015 Notes Receivable Explanation Ref. 200,000 Debit No. Credit 3,153,600 15,000 62,640,000 55,100,000 35,000 2,160,000 3,153,600 5,000 Debit No. Credit 1005 Balance 0 Inventory Explanation Ref. J585 J585 J585 J585 J586 J586 Debit No. Credit 23,200,000 14,000 25,000,000 85,000 800,000 6,603,000 24,000 Office Supplies: Administrative Date Explanation Ref. 12/31/2015 Balance 1/1-11/30/16 J585 Supplies: Sales Explanation Balance 1003 Balance 3,353,600 200,000 185,000 62,825,000 7,725,000 7,690,000 9,850,000 6,696,400 6,691,400 1004 Balance 24,500 9,500 4,500 4,500 15,000 5,000 Debit WS 3 - 1 1002 Balance 936,714 1,136,714 No. Credit Balance Date 12/31/2015 Balance 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 12/6/2016 12/13/2016 12/14/2016 Date 12/31/2015 Debit No. Credit Ref. Debit No. Credit 1007 Balance 5,780 7,980 7,980 No. Credit 1008 Balance 17,860 2,200 Debit 1006 Balance 27,897,000 4,697,000 4,711,000 29,711,000 29,626,000 28,826,000 35,429,000 35,405,000 1/1-11/30/16 J585 Date 12/31/2015 Balance 1/1-11/30/16 1/1-11/30/16 Prepaid Insurance: Sales Explanation Ref. J585 J585 Prepaid Insurance: Administrative Date Explanation Ref. 12/31/2015 Balance 1/1-11/30/16 J585 1/1-11/30/16 J585 Date 12/31/2015 Date 12/31/2015 Trading Securities Explanation Ref. 5,260 Debit 200,000 240,000 Debit Date 12/31/2015 No. Credit 100,000 120,000 Debit No. Credit 1010 Balance 120,000 220,000 100,000 100,000 1050 Balance Balance 0 Available-for-Sale Securities Explanation Ref. Debit No. Credit 1051 Balance 650,000 No. Credit 1052 Balance 14,500 14,500 No. Credit 1100 Balance Balance Securities Fair Value Adjustment (Available-for-Sale) Date Explanation Ref. Debit 12/31/2015 Balance - credit balance Date 12/31/2015 No. Credit 23,120 23,120 WS 3 - 2 1009 Balance 240,000 440,000 200,000 200,000 Held-to-Maturity Securities Explanation Ref. Debit Balance 0 Land Explanation Ref. Debit No. Credit 1200 Balance 7,980,000 Debit No. Credit 1210 Balance 15,600,000 Debit No. Credit 1211 Balance 1,600,000 1,600,000 Balance Buildings: Sales Explanation Date 12/31/2015 Balance Date 12/31/2015 Accumulated Depreciation: Sales Buildings Explanation Ref. Balance Buildings: Administrative Ref. No. 1220 Date 12/31/2015 Debit Credit Accumulated Depreciation: Administrative Buildings Date Explanation Ref. Debit 12/31/2015 Balance No. Credit Date 12/31/2015 12/14/2016 12/16/2016 Date 12/31/2015 12/16/2016 Date 12/31/2015 Explanation Ref. Balance Equipment: Sales Explanation Ref. Debit J586 J586 15,000,000 Balance Accumulated Depreciation: Sales Equipment Explanation Ref. Balance J586 Office Equipment Explanation Ref. 400,000 Date 12/31/2015 Ref. No. Credit 1240 Balance 1,365,000 No. Credit 1241 Balance 780,000 780,000 Debit No. Credit 1320 Balance 95,000 Debit No. Credit 1330 Balance Debit 80,000 Debit Balance Trademark Explanation Ref. 1230 Balance 5,460,000 20,460,000 20,060,000 1231 Balance 4,368,000 4,288,000 4,288,000 Balance Goodwill Explanation WS 3 - 3 1221 Balance 640,000 640,000 No. Credit Accumulated Depreciation: Administrative Equipment Date Explanation Ref. Debit 12/31/2015 Balance Date 12/31/2015 No. Credit Balance 6,240,000 Balance 0 Copyright Explanation Date 12/31/2015 Ref. Balance Date 12/31/2015 Unamortized Bond Issue Costs Explanation Ref. Balance Debit No. Credit 1340 Balance 600,000 600,000 Debit No. Credit 1500 Balance 0 Date 12/31/2015 Balance 1/1-11/30/16 1/1-11/30/16 12/13/2016 Date 12/31/2015 12/1/2016 Date 12/31/2015 Accounts Payable Explanation Ref. J585 J585 J586 Notes Payable Explanation Ref. Date 12/31/2015 465,000 5,000,000 6,603,000 Debit J586 Discount on Notes Payable Explanation Ref. 2010 Balance 50,000 0 No. Credit 2011 Balance 50,000 Debit WS 3 - 4 2001 Balance 465,000 0 5,000,000 11,603,000 11,603,000 No. Credit Balance Balance 0 Unearned Revenue: Extended Warranties Date Explanation Ref. 12/31/2015 Balance 1/1-11/30/16 J585 12/31/2016 J586 Date 12/31/2015 12/1/2016 Debit No. Credit Interest Payable Explanation Ref. Debit No. Credit 1,160,000 140,000 Debit No. Credit 2030 Balance 1,000 (3,000) No. Credit 2040 Balance Balance J586 Bond Interest Payable Explanation Ref. 4,000 Debit 2020 Balance 140,000 1,300,000 1,160,000 Balance 0 Estimated Liability under Warranties Date Explanation Ref. 12/31/2015 Balance 1/1-11/30/16 J585 12/14/2016 J586 Date 12/31/2015 Balance 1/1-11/30/16 1/1-11/30/16 Wages and Salaries Payable Explanation Ref. J585 J585 Debit No. Credit 2050 Balance 175,000 55,000 25,000 25,000 No. Credit 2060 Balance 120,000 30,000 Debit 2,420,120 2,420,120 0 2,420,120 0 12/14/2016 12/14/2016 12/28/2016 12/28/2016 12/31/2016 12/31/2016 Date 12/31/2015 Balance 1/1-11/30/16 1/1-11/30/16 12/14/2016 12/14/2016 12/28/2016 12/28/2016 12/31/2016 12/31/2016 Date 12/31/2015 Balance 1/1-11/30/16 1/1-11/30/16 12/14/2016 12/14/2016 12/28/2016 12/28/2016 12/31/2016 12/31/2016 Date 12/31/2015 Balance 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 12/14/2016 12/14/2016 12/14/2016 12/14/2016 12/28/2016 12/28/2016 12/28/2016 12/28/2016 12/31/2016 J586 J586 J586 J586 J586 J586 Federal Withholding Payable Explanation Ref. J585 J585 J586 J586 J586 J586 J586 J586 State Withholding Payable Explanation Ref. J585 J585 J586 J586 J586 J586 J586 J586 Social Security Payable Explanation Ref. J585 J585 J585 J585 J586 J586 J586 J586 J586 J586 J586 J586 J586 102,130 102,130 102,130 102,130 10,213 10,213 Debit No. Credit 504,000 504,000 21,000 21,000 21,000 21,000 2,100 2,100 Debit No. Credit 252,000 252,000 10,500 10,500 10,500 10,500 1,050 1,050 Debit No. Credit 135,160 135,160 135,160 135,160 4,340 4,340 4,340 4,340 4,340 4,340 4,340 4,340 434 102,130 0 102,130 0 10,213 WS 3 - 5 2064 Balance 0 504,000 0 21,000 0 21,000 0 2,100 0 2065 Balance 0 252,000 0 10,500 0 10,500 0 1,050 0 2066 Balance 0 135,160 0 135,160 0 4,340 0 4,340 0 4,340 0 4,340 0 434 12/31/2016 12/31/2016 12/31/2016 J586 J586 J586 Date 12/31/2015 Balance 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 1/1-11/30/16 12/14/2016 12/14/2016 12/14/2016 12/14/2016 12/28/2016 12/28/2016 12/28/2016 12/28/2016 12/31/2016 12/31/2016 12/31/2016 12/31/2016 Medicare Payable Explanation Ref. J585 J585 J585 J585 J586 J586 J586 J586 J586 J586 J586 J586 J586 J586 J586 J586 Federal Unemployment Tax Payable Date Explanation Ref. 12/31/2015 Balance 1/21/2016 J585 1/1-11/30/16 J585 State Unemployment Tax Payable Date Explanation Ref. 12/31/2015 Balance 1/1-11/30/16 J585 1/1-11/30/16 J585 Dividends Payable: Preferred Stock Date Explanation Ref. 12/31/2015 Balance 12/31/2016 J586 Date 12/31/2015 12/31/2016 Dividends Payable: Common Stock Explanation Ref. Balance J586 434 434 434 Debit No. Credit 48,720 48,720 48,720 48,720 2,030 2,030 2,030 2,030 2,030 2,030 2,030 2,030 203 203 203 203 Debit No. Credit 2,072 2,240 Debit No. Credit 12,600 12,600 Debit No. Credit 600,000 Debit No. Credit 220,000 0 434 0 WS 3 - 6 2067 Balance 0 48,720 0 48,720 0 2,030 0 2,030 0 2,030 0 2,030 0 203 0 203 0 2068 Balance 2,072 0 2,240 2069 Balance 0 12,600 0 2070 Balance 0 600,000 600,000 2071 Balance 0 220,000 220,000 Date 12/31/2015 Balance 1/1-11/30/16 1/1-11/30/16 Income Tax Payable Explanation J585 J585 Sales Tax Payable Date Explanation 12/31/2015 Balance 1/1-11/30/16 1/1-11/30/16 Sales taxes paid up to September 1 12/6/2016 12/20/2016 Date 12/31/2015 12/31/2016 Date 12/31/2015 12/31/2016 Bond Payable Explanation Date 12/31/2015 Ref. J585 J585 J586 J586 Ref. Debit 200,000 750,000 Debit No. Credit 4,640,000 3,600,000 160,000 1,040,000 Debit No. Credit Balance J586 Premium on Bonds Payable Explanation Ref. 20,000,000 Debit No. Credit Balance J586 Date 12/31/2015 Balance 1/1-11/30/16 12/31/2016 Date 12/31/2015 Ref. No. Credit Discount on Bonds Payable Explanation Ref. 1,600,000 Debit J585 J586 Mortgage Payable Explanation Ref. No. Credit 132,193 140,125 Debit No. Credit 2072 Balance 200,000 0 750,000 750,000 WS 3 - 7 2073 Balance 80,000 4,720,000 1,120,000 1,280,000 240,000 2500 Balance 40,000,000 60,000,000 2510 Balance 0 1,600,000 2520 Balance 4,463,450 4,331,257 4,191,132 2600 Balance Balance 0 Preferred Stock Explanation Ref. Debit No. Credit 3001 Balance 2,000,000 Common Stock Explanation Ref. Debit No. Credit 3010 Balance 8,000,000 Debit No. Credit 3020 Balance Balance Date 12/31/2015 Balance Date 12/31/2015 Common Stock Dividend Distributable Explanation Ref. Balance 0 Paid-in-Capital in Excess of Par: Preferred Stock Date Explanation Ref. 12/31/2015 Balance Date 12/31/2015 Paid-in-Capital in Excess of Par: Common Stock Explanation Ref. Balance Date 12/31/2015 12/1/2016 Paid-in-Capital from Treasury Stock Explanation Ref. Balance J586 Date 12/31/2015 Paid-in-Capital from Stock Warrants Explanation Ref. Balance Date 12/31/2015 12/1/2016 Date 12/31/2015 12/31/2016 Date Treasury Stock Explanation Ref. Debit No. Credit 3101 Balance 760,000 Debit No. Credit 3110 Balance 11,200,000 Debit No. Credit 20,000 Debit No. Credit Debit J586 Ref. No. Credit 40,000 Debit Income Summary Explanation Ref. 3500 Balance 5,529,532 4,709,532 4,709,532 No. Credit 3600 Balance 820,000 Debit 3140 Balance 100,000 60,000 No. Credit Balance J586 3130 Balance 0 Balance Retained Earnings Explanation WS 3 - 8 3120 Balance 0 20,000 0 0 0 Date 12/31/2015 Date 1/1-11/30/16 12/6/2016 12/31/2016 Unrealized Holding Gain or Loss: Equity Explanation Ref. Balance - debit balance Sales Explanation Ref. J585 J586 J586 Debit Debit No. Credit No. Credit 58,000,000 2,000,000 140,000 3800 Balance 14,500 14,500 4000 Balance 58,000,000 60,000,000 60,140,000 60,140,000 Date 1/1-11/30/16 Date 1/1-11/30/16 1/1-11/30/16 12/12/2016 Sales Returns and Allowances Explanation Ref. J585 Sales Discounts Explanation Ref. J585 J585 J586 Debit 35,000 Debit 63,072 1,102,000 63,072 No. Credit 4001 Balance 35,000 35,000 No. Credit 4002 Balance 63,072 1,165,072 1,228,144 1,228,144 WS 3 - 9 4100 Balance 0 Date Interest Revenue Explanation Ref. Debit No. Credit Date Dividend Revenue Explanation Ref. Debit No. Credit 4200 Balance 0 Date Gain on Transaction Explanation Ref. Debit No. Credit 4300 Balance 0 0 Date 1/1-11/30/16 1/1-11/30/16 12/6/2016 Date 1/1-11/30/16 Date Cost of Goods Sold Explanation Advertising Expense Explanation Amortization Expense Explanation Ref. J585 J585 J586 Ref. J585 Ref. Debit 23,200,000 No. Credit 14,000 800,000 Debit 5,000,000 Debit 5000 Balance 23,200,000 23,186,000 23,986,000 23,986,000 No. Credit 5100 Balance 5,000,000 5,000,000 No. Credit 5110 Balance 0 0 Date Bad Debts Expense Explanation Ref. Debit No. Credit 5120 Balance 0 0 Date Bond Interest Expense Explanation Ref. Debit No. Credit 5130 Balance 1/1-11/30/16 12/31/2016 J585 J586 Bond Issue Expense Explanation Date Ref. 2,132,193 2,140,125 Debit 2,132,193 4,272,318 4,272,318 No. Credit 5140 Balance 0 Depreciation Expense: Administrative Explanation Ref. Date Date Depreciation Expense: Sales Explanation Date 1/1-11/30/16 Freight and Transportation-Out Expense Explanation Ref. J585 Date 1/1-11/30/16 Insurance Expense: Administrative Explanation Ref. J585 Date 1/1-11/30/16 Insurance Expense: Sales Explanation Interest Expense Explanation Date Ref. Ref. J585 Ref. Debit Debit Debit 3,500,000 Debit 120,000 Debit 240,000 Debit No. Credit No. Credit 5150 Balance 0 0 WS 3 - 10 5160 Balance 0 0 No. Credit 5170 Balance 3,500,000 3,500,000 No. Credit 5180 Balance 120,000 120,000 120,000 No. Credit 5190 Balance 240,000 240,000 240,000 No. Credit 5200 Balance 0 0 Date 1/1-11/30/16 Income Tax Expense Explanation Ref. J585 Legal and Professional Expense: Administrative Debit 750,000 No. Credit No. 5210 Balance 750,000 750,000 750,000 5220 Date 1/1-11/30/16 Date Explanation Ref. J585 Office Supplies Expense: Administrative Explanation Ref. Debit 165,000 Debit Credit Balance 165,000 165,000 No. Credit 5230 Balance 0 0 Date 1/1-11/30/16 12/14/2016 12/28/2016 12/31/2016 Date 1/1-11/30/16 Date 1/1-11/30/16 Date Payroll Tax Expense Explanation Ref. J585 J586 J586 J586 Debit 198,720 6,370 6,370 637 Property Tax Expense: Administrative Explanation Ref. J585 Debit 200,000 Property Tax Expense: Sales Explanation Rent Expense: Administrative Explanation Ref. J585 Debit 350,000 Ref. Debit No. Credit WS 3 - 11 5235 Balance 198,720 205,090 211,460 212,097 212,097 No. Credit 5240 Balance 200,000 200,000 No. Credit 5250 Balance 350,000 350,000 No. Credit 5260 Balance 0 Date Rent Expense: Sales Explanation Ref. Debit No. Credit 5270 Balance 0 Date Research and Development Expense Explanation Ref. Debit No. Credit 5280 Balance 0 Date 1/1-11/30/16 Salaries Expense: Administrative Explanation Ref. J585 Debit 1,680,000 No. Credit 5290 Balance 1,680,000 12/14/2016 12/28/2016 12/31/2016 Date 1/1-11/30/16 12/14/2016 12/28/2016 12/31/2016 Date Date 1/1-11/30/16 12/5/2016 Date 1/1-11/30/16 12/5/2016 Date 1/1-11/30/16 12/14/2016 12/28/2016 12/31/2016 Date 1/1-11/30/16 12/14/2016 12/28/2016 12/31/2016 J586 J586 J586 Salaries Expense: Sales Explanation Supplies Expense: Sales Explanation Ref. J585 J586 J586 J586 Ref. Utilities Expense: Administrative Explanation Ref. J585 J586 Utilities Expense: Sales Explanation 70,000 70,000 7,000 Debit 192,000 8,000 8,000 800 Debit Debit 22,000 2,000 Ref. J585 J586 Debit 16,500 1,500 Wages Expense: Administrative Explanation Ref. J585 J586 J586 J586 Debit 720,000 30,000 30,000 3,000 Wages Expense: Sales Explanation Ref. J585 J586 J586 J586 Debit 768,000 32,000 32,000 3,200 1,750,000 1,820,000 1,827,000 1,827,000 No. Credit No. Credit 5300 Balance 192,000 200,000 208,000 208,800 208,800 WS 3 - 12 5310 Balance 0 0 No. Credit 5320 Balance 22,000 24,000 24,000 24,000 No. Credit 5330 Balance 16,500 18,000 18,000 18,000 No. Credit 5340 Balance 720,000 750,000 780,000 783,000 783,000 No. Credit 5350 Balance 768,000 800,000 832,000 835,200 835,200 Date Warranty Expense Explanation Ref. Debit No. Credit 5360 Balance 0 0 Date Loss on Impairment Explanation Ref. Debit No. Credit 5500 Balance 0 Date 12/16/2016 Loss on Transaction Explanation Ref. J586 Debit 170,000 No. Credit 5510 Balance 170,000 WS 3 - 13 BAY YACHT CORPORATION WORKSHEET For the Year Ended December 31, 2016 Accounts Cash - Checking Accounts Cash - Savings Accounts Accounts Receivable Trial Balance Debit Credit 26,009,367 1,136,714 6,691,400 4,500 Allowance for Doubtful Accounts Notes Receivable Inventory Office Supplies: Administrative Supplies: Sales Prepaid Insurance: Sales Prepaid Insurance: Administrative 35,405,000 7,980 23,120 200,000 100,000 Trading Securities Available-for-Sale Securities 650,000 14,500 Securities Fair Value Adjustment (AFS) Held-to-Maturity Securities Land Buildings: Sales 7,980,000 15,600,000 1,600,000 Accumulated Depreciation: Sales Buildings Buildings: Administrative 6,240,000 640,000 Accumulated Depreciation: Administrative Bldg. Equipment: Sales 20,060,000 4,288,000 Accumulated Depreciation: Sales Equipment Office Equipment 1,365,000 780,000 Accumulated Depreciation: Administrative Eq. Goodwill 95,000 Trademark Copyright 600,000 Unamortized Bond Issue Costs Accounts Payable 11,603,000 Notes Payable Discount on Notes Payable Unearned Revenue: Extended Warranties Interest Payable Bond Interest Payable 1,160,000 (3,000) Adjustments Debit Credit Adjusted Trial Balance Debit Credit Income Statement Debit Credit 25,000 Estimated Liability under Warranties Wages and Salaries Payable Federal Withholding Payable State Withholding Payable Social Security Payable Medicare Payable 2,240 Federal Unemployment Tax Payable State Unemployment Tax Payable 600,000 220,000 750,000 240,000 60,000,000 1,600,000 Dividends Payable: Preferred Stock Dividends Payable: Common Stock Income Tax Payable Sales Tax Payable Bond Payable Premium on Bonds Payable Discount on Bonds Payable 4,191,132 Mortgage Payable 2,000,000 8,000,000 Preferred Stock Common Stock Common Stock Dividend Distributable 760,000 11,200,000 20,000 Paid-in-Capital in Excess of Par: Preferred Stock Paid-in-Capital in Excess of Par: Common Stock Paid-in-Capital from Treasury Stock Paid-in-Capital from Stock Warrants Treasury Stock 60,000 4,709,532 Retained Earnings Income Summary Unrealized Holding Gain or Loss: Equity 14,500 60,140,000 Sales Sales Returns and Allowances Sales Discounts 35,000 1,228,144 Interest Revenue Extended Warranty Revenue Gain on Transaction Cost of Goods Sold Advertising Expense Amortization Expense Bad Debts Expense 23,986,000 5,000,000 Bond Interest Expense 4,272,318 Bond Issue Expense Depreciation Expense: Administrative Depreciation Expense: Sales Freight and Transportation-out Expense Insurance Expense: Administrative Insurance Expense: Sales 3,500,000 120,000 240,000 Interest Expense Income Tax Expense Legal and Professional Expense: Administrative 750,000 165,000 Office Supplies Expense: Administrative Payroll Tax Expense Property Tax Expense: Administrative Property Tax Expense: Sales 212,097 200,000 350,000 Rent Expense: Administrative Rent Expense: Sales Research and Development Expense Salaries Expense: Administrative Salaries Expense: Sales 1,827,000 208,800 Supplies Expense: Sales Utilities Expense: Administrative Utilities Expense: Sales Wages Expense: Administrative Wages Expense: Sales 24,000 18,000 783,000 835,200 Warranty Expense Loss on Impairment Loss on Transaction 170,000 170,353,772 170,353,772 170,404,902 170,404,902 7,966,653 7,966,653 178,078,185 178,078,185 (170,404,902) (170,404,902) (7,966,653) (7,966,653) (178,078,185) (178,078,185) Totals (check figures for this line are below) Net Income Totals Check Figures Double-check Check Figures* Check figures may be off by a dollar because of payroll numbers due to spreadsheet rounding errors. 51,700,242 60,210,000 *If Line 106 totals equal Line 112 totals, then Line 114 double-check figures should equal zero. If not, there is an error. Second page of the worksheet was not numbered by intent. WS 4 - 1 Balance Sheet Debit Credit 126,377,943 117,868,185 WS 4 - 2 WS 4 - 3 BAY YACHT CORPORATION In Worksheet 7, prepare the following financial statements for Bay Yacht Corporation for the year-ended December 31, 2016, in a professional manner. Blank financial statement templates are set up in Worksheet 7. Do not change the formatting of the templates. Do not landscape financial statements. Show disclosure computations where necessary in parenthesis or on a separate schedule. No abbreviations are allowed and the financial statements must be spell-checked. 1. Multiple-step Income Statement (including the appropriate Earnings per Share numbers). The Payroll Tax Expense can be included under Administrative Expenses based on materiality. 2. Comprehensive Income Statement 3. Retained Earnings Statement 4. Classified Balance Sheet (including the required disclosures). Show the carrying value for each bond separately. 5. Account names must be used exactly as shown in the Chart of Accounts. 6. Points will be deducted for spelling errors. WS 5 - 1 BAY YACHT CORPORATION - PAYROLL INFORMATION Salaries Expense: Administrative (5)* Salaries Expense: Sales (4)* Wages Expense: Administrative (15)* Wages Expense: Sales (16)* Gross Pay 1,680,000 192,000 720,000 768,000 15% Federal Withholding 252,000 28,800 108,000 115,200 11/30/2016 Sub-Totals (24 payrolls) 3,360,000 504,000 252,000 Salaries Expense: Administrative (5)* Salaries Expense: Sales (4)* Wages Expense: Administrative (15)* Wages Expense: Sales (16)* 70,000 8,000 30,000 32,000 10,500 1,200 4,500 4,800 12/14/2016 Sub-Totals (25 payrolls) 3,500,000 Salaries Expense: Administrative (5)* Salaries Expense: Sales (4)* Wages Expense: Administrative (15)* Wages Expense: Sales (16)* Payroll Register 7.5% 6.2% to $100,000 State Social Withholding Security 126,000 31,000 14,400 11,904 54,000 44,640 57,600 47,616 1.45% Medicare 24,360 2,784 10,440 11,136 Net Pay 1,246,640 134,112 502,920 536,448 135,160 48,720 2,420,120 5,250 600 2,250 2,400 0 496 1,860 1,984 1,015 116 435 464 53,235 5,588 20,955 22,352 525,000 262,500 139,500 50,750 2,522,250 70,000 8,000 30,000 32,000 10,500 1,200 4,500 4,800 5,250 600 2,250 2,400 0 496 1,860 1,984 1,015 116 435 464 53,235 5,588 20,955 22,352 12/28/2016 Sub-Totals (26 payrolls) 3,640,000 546,000 273,000 143,840 52,780 2,624,380 Salaries Expense: Administrative (5)* Salaries Expense: Sales (4)* Wages Expense: Administrative (15)* Wages Expense: Sales (16)* 7,000 800 3,000 3,200 1,050 120 450 480 525 60 225 240 0 50 186 198 102 12 44 46 5,324 559 2,096 2,235 3,654,000 548,100 274,050 144,274 52,983 2,634,593 12/31/2016 Totals * The number in parenthesis indicates the number of employees in this category. The Corporation retained employees for the whole year. WS 6 -1 Payroll Tax Register Salaries Expense: Administrative Salaries Expense: Sales Wages Expense: Administrative Wages Expense: Sales 11/30/2016 Sub-Totals (24 payrolls) Salaries Expense: Administrative Salaries Expense: Sales Wages Expense: Administrative Wages Expense: Sales 12/14/2016 Sub-Totals (25 payrolls) Salaries Expense: Administrative Salaries Expense: Sales Wages Expense: Administrative Wages Expense: Sales 12/28/2016 Sub-Totals (26 payrolls) Salaries Expense: Administrative Salaries Expense: Sales Wages Expense: Administrative Wages Expense: Sales 12/31/2016 Totals Total 6.2% to $100,000 Payroll Social Taxes Security 57,215 31,000 16,172 11,904 60,645 44,640 64,688 47,616 1.45% Medicare 24,360 2,784 10,440 11,136 4.5% to $7,000 .8% to $7,000 Unemployment Unemployment SUTA FUTA 1,575 280 1,260 224 4,725 840 5,040 896 198,720 135,160 48,720 12,600 2,240 1,015 612 2,295 2,448 0 496 1,860 1,984 1,015 116 435 464 0 0 0 0 0 0 0 0 205,090 139,500 50,750 12,600 2,240 1,015 612 2,295 2,448 0 496 1,860 1,984 1,015 116 435 464 0 0 0 0 0 0 0 0 211,460 143,840 52,780 12,600 2,240 102 61 230 245 0 50 186 198 102 12 44 46 0 0 0 0 0 0 0 0 212,097 144,274 52,983 12,600 2,240 WS 6 -2 WS 7 -1 Note: Net Income on the Income Statement has to match the Worksheet Net Income. WS 7 - 2 Prepare the Comprehensive Income Statement and the Retained Earnings Statement in the two sections provided on this page. There is enough room provided. Do not add extra lines. WS 7 - 3 WS 7 - 4 WS 7 - 5 NOTES: Total Liabilities and Stockholders' Equity check figure is $110,219,434. Worksheet 7 (WS7) pages WS7-4 to WS7-6 are to be used for the Balance Sheet. When preparing financial statements using more than one page, try to make your page breaks in a logical manner. Do not change the formatting by adding or deleting lines. There is enough space provided. No abbreviations are allowed on the Financial Statements. It is not necessary to use dollar signs for numbers. However, format all whole numbers with commas, and only Earnings per Share numbers contain cents. WS 7 - 6