Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

*I need help with number 19* COMPREHENSIVE APPLICATION PROJECT The following is a list of accounts (balances as of Dec. 31, 2016) that will be

*I need help with number 19*

COMPREHENSIVE APPLICATION PROJECT

The following is a list of accounts (balances as of Dec. 31, 2016) that will be needed to accurately complete this project. You will have to journalize all appropriate transactions associated with the transactions below associated with 2017 (if decimals exist, please round to the nearest whole number). In addition, you will need to prepare an income statement, a retained earnings statement, and a detailed, comprehensive balance sheet for December 31, 2017.

Cash

$2,838,241

Accounts Payable

103,000

Long-term Notes Payable

$120,000

Intangible Assets

$1,227,845

FUTA Taxes Payable

$40

Treasury Stock

$135,000

FICA Taxes Payable

$7,700

Unearned Revenue

$16,000

Interest Payable

$80,000

Retained Earnings

$499,540

SUTA Taxes Payable

$60

Accounts Receivable

$1,434,485

Inventory

$663,500

Dividends Payable

$210,000

Federal Inc. Tax Withholding Payable

$35,000

LIFO Reserve

$129,620

Allowance for Doubtful Accounts

$43,035

Machinery

$300,000

Bonds Payable

$1,000,000

Estimated Warranty Payable

$18,500

Common Stock, $5 par value

$2,700,000

Equipment

$65,000

Additional Paid-in Capital

$1,590,000

Accumulated Depreciation Equipment

$56,884

Accumulated Depreciation Machinery

$141,797

Discount on Bonds Payable

$87,105

1.Purchased inventory of $980,000 by paying $65,000 on account and the remainder in cash.

2.Paid the dividends that were owed.

3.Paid the estimated warranties owed.

4.On January 1, 2017, we received a $450,000, 5% interest, 3-year note for services rendered. The prevailing market interest rate is 8% at the time the note is received. Interest on the note is due annually on January 1.

5.A machine which cost $300,000 was acquired on October 1, 2014. Its estimated salvage value is $30,000 and its expected life is eight years. Record any necessary 2017 entries associated with this machine. The machine is depreciated using the double-declining balance method. On May 1, 2017, this machine has a fair value of $220,000 and is exchanged for similar equipment having a fair value of $190,000 and $30,000 cash is received. This exchange lacks commercial substance.

6.During the year, we wrote-off $48,000 of our uncollectible accounts.

7.Collected $897,000 of our accounts receivable.

8.Judd Company sells computers for $1,950 each. The cost of the computers was $900 each. During 2017, the company sold 850 computers. 80% of the sales were on account, the remainder of the sales were for cash.

9.Purchased a truck for $86,000 cash on May 20, 2017. The truck has a five year useful life and will be depreciated using the double-declining depreciation method.

10.Judd Company has ending inventory in 2012 of $500,000, an ending inventory of $605,000 in 2013, an ending inventory of $713,000 in 2014, an ending inventory of $786,000 in 2015, and an ending inventory of $663,500 in 2016. The price index for each year is 100, 110, 115,120, 125 respectively. The price index for 2017 is 130. Using dollar-value LIFO, calculate the ending inventory that should be reported on the 2017 year-end balance sheet (report it appropriately).

11.Assume that the estimate of uncollectible accounts is determined by taking 3% of gross accounts receivable and is accounted for on December 31.

12.On March 3, 2017, reissued the treasury stock currently held in the treasury at cost.

13.On January 1, 2013, Judd Company sold $1,000,000 in long-term bonds. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on January 1 of each year. The bonds are to be accounted for under the effective-interest method.

14.Paid all payroll taxes that were owed as of Dec. 31, 2016.

15.On April 30, 2017, declared a $0.20 per share cash dividend, payable May 15, 2017 to stockholders of record on May 8, 2017.

16.Purchased 18,000 shares of stock for treasury for $9 per share.

17.On December 31, 2017, we redeemed $400,000 of the bonds described in transaction (12) at 102, after all other entries have been recorded.

18.Issued 120,000 shares of stock for $16 per share.

19.On December 31, 2017, Judd Company accrues that payroll that has been earned during the last payroll cycle. As of that date, payroll was $220,000, of which $170,000 represented amounts paid in excess of $113,700 to certain employees. The amount paid to employees in excess of $7,000 was $195,000. Income taxes withheld were $42,000. The state unemployment tax is 1.2%, the federal unemployment tax is .8%, and the F.I.C.A. tax is 7.65% on an employees salaries and wages to $113,700 and 1.45% in excess of $113,700. The payroll will be paid on January 8, 2018.

20.On April 26, 2017, Judd purchases equipment by issuing a $530,000, 5%, 5-year note. The market rate of interest for similar notes is 3%. The machinery has a 10-year useful life and a $20,000 salvage value. The equipment is to be depreciated using the straight-line method.

21.On Dec. 12, 2017, declared a $0.40 per share cash dividend, payable February 15, 2018 to stockholders of record on February 5, 2018.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting For Decision Makers

Authors: Eddie McLaney, Peter Atrill

4th Edition

9780273688471

More Books

Students also viewed these Accounting questions

Question

=+a) What assumptions and/or conditions are violated by this model?

Answered: 1 week ago