Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Instructions: 1. Prepare journal entries for each event. 2. Prepare adjusting entries. 3. Prepare adjusted trial balance. 4. Prepare Income Statement, Retained Earnings Statement and

Instructions:

1. Prepare journal entries for each event.

2. Prepare adjusting entries.

3. Prepare adjusted trial balance.

4. Prepare Income Statement, Retained Earnings Statement and Balance Sheet for the year of 2017.

5. Prepare closing entries.

6. Upload the complete Excel file by Nov 1.

The balance sheet of the Captain Fishing Inc. is attached. During 2017, the following events occurred.

1. On January 10, sold merchandise on account to Rayms $8800 and Fischer $7500. Terms 2/10, n/30.

2. On January 12, purchased merchandise on account from Zapfel $3600 and Liotta $2600. Terms 1/10, n/30.

3. On January 14, received checks, $4700 from Longhini and $2500 from Hall, for sales on account after discount period has lapsed.

4. On January 15, sent checks to Joosten for $8600 less 3% cash discount, and to Maida for $10000 less 2% cash discount.

5. On January 16, issued credit of $550 to Fischer for merchandise returned.

6. On January 21, paid off the balances to Zapfel and Liotta for the purchases made on January 12.

7. On Feburary 9, received payment in full from Rayms and Fischer.

8. On March 1, paid rent of $8400 for a two-year term starting from July 1, 2017.

9. On April 1, the company CEO paid $49000 from her savings bank account to purchase a car for personal use.

10. On April 12, paid $785 cash for office supplies and expensed immediately.

11. Cash dividends totaling $1433 were declared on June 13 and paid to stockholders on June 23.

12. Issued a note of $110000 to bank (one year, annual interest rate 5%) for cash on July 1.

13. On July 5, purchased merchandise from Maida $33000 terms 3/10, n/30.

14. On July 7, issued common stock 1150 shares, $10 par, in exchange of a land with a fair market value of $16000.

15. On July 8, returned $327 of merchandise to Maida and received credit.

16. On August 1, sold merchandise to Lachey on account $83800, term 1/10, n/30.

17. Paid off the balance to Maida on August 4.

18. On Auguest 8, paid utilities expense, $10324.

19. On August 18, Lachey paid off its balance.

20. On September 1, paid cash $7550 to Farmington for merchandise purchased last year.

21. On October 1, paid off notes payable $130000 (issued in 2015) and associated interest $6000 (this amount includes $1800 interest payable on the balance sheet).

22. Over the year, cash sales to other retail customers were $16332.

23. Over the year, sales and office employees earned $24800 in salaries and wages, of which $2480 remained as payable at the end of year.

24. On Dec 31, received an utilities bill of $1350 (for December 2016) and paid off the bill on January 10, 2018.

25. On Dec 31, paid 5% interest on bonds payable.

Additional Information at the end of the year:

1 .Depreciation expense for the year was $12560.

2. The company estimated that it will pay federal income tax, $4225.

3. After physically counting, the company decided that the ending inventories was $41179.

4. Based on its historical data, the bad debts expense are about $1070.

5. Unearned revenue was decreased by $11520.

6. The company expenses all of the supplies purchased during the year.

7. No insurance policy was effective during the year (will be effective from Jan 1, 2018).

8. The company uses the gross method to record its purchases and sales on credit.

9. The company adopts the periodic inventory system.

10. Rayms, Fischer, and Lachey had zero balance on account as of Jan 1, 2017.

CAPTAIN FISHING INC.

BALANCE SHEET

DECEMBER 31, 2016

Current Assets

Cash

41,800

Notes Receivable

16,000

Accounts Receivable

41,800

Less: Allowance for Doubtful Accounts

(3,000)

Inventories

42,000

Prepaid Insurance

840

Total Current Assets

139,440

Non-Current Assets

Long-term Investments

Investments in held-for-maturity securities

51,000

Land held for future development

45,500

Property, Plant, and Equipment

Land

85,000

Buildings

675,000

Less: Accumulated Depreciation

(187,500)

Intangible Assets

Capitalized Development Costs

8,000

Goodwill

76,000

Other Identifiable Intangible Assets

48,000

Total Non-Current Assets

801,000

Total Assets

940,440

Current Liabilities

Notes Payable

130,000

Accounts Payable

33,500

Unearned Revenues

16,000

Income Taxes Payable

9,440

Property Taxes Payable

6,600

Interest Payable

1,800

Total Current Liabilities

197,340

Non-Current Liabilities

Provisions Related to Pensions

93,100

Bonds Payable

300,000

Total Non-Current Liabilities

393,100

Total Liabilities

590,440

Stockholders' Equity

Common Stock

100,000

Preferred Stock

100,000

Paid-in-capital - Common Stock

27,500

Paid-in-capital - Preferred Stock

10,000

Retained Earnings

120,250

Accumulated Other Comprehensive Income

5,000

Less: Treasury Stock

(12,750)

Total Stockholders' Equity

350,000

Total Liabilities and Stockholders' Equity

940,440

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

Accounting Essentials For Hospitality Managers

Authors: Chris Guilding

3rd Edition

0415841097, 978-0415841092

More Books

Students also viewed these Accounting questions