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Kenseth Corporations unadjusted trial balance at December 1, 2014, is presented below. Debit Credit Cash $26,890 Accounts Receivable 35,290 Notes Receivable 8,400 Interest Receivable 0
Kenseth Corporations unadjusted trial balance at December 1, 2014, is presented below.
Debit | Credit | ||
Cash | $26,890 | ||
Accounts Receivable | 35,290 | ||
Notes Receivable | 8,400 | ||
Interest Receivable | 0 | ||
Inventory | 36,210 | ||
Prepaid Insurance | 3,810 | ||
Land | 20,200 | ||
Buildings | 162,000 | ||
Equipment | 61,000 | ||
Patent | 10,530 | ||
Allowance for Doubtful Accounts | $440 | ||
Accumulated DepreciationBuildings | 54,000 | ||
Accumulated DepreciationEquipment | 24,400 | ||
Accounts Payable | 28,400 | ||
Salaries and Wages Payable | 0 | ||
Notes Payable (due April 30, 2015) | 12,400 | ||
Interest Payable | 0 | ||
Notes Payable (due in 2020) | 35,730 | ||
Common Stock | 59,500 | ||
Retained Earnings | 56,570 | ||
Dividends | 14,800 | ||
Sales Revenue | 917,700 | ||
Interest Revenue | 0 | ||
Gain on Disposal of Plant Assets | 0 | ||
Bad Debt Expense | 0 | ||
Cost of Goods Sold | 639,600 | ||
Depreciation Expense | 0 | ||
Insurance Expense | 0 | ||
Interest Expense | 0 | ||
Other Operating Expenses | 61,310 | ||
Amortization Expense | 0 | ||
Salaries and Wages Expense | 109,100 | ||
Total | $1,189,140 | $1,189,140 |
The following transactions occurred during December.
Dec.2 | Kenseth purchased equipment for $17,400, plus sales taxes of $1,800 (all paid in cash). | |
2 | Kenseth sold for $3,500 equipment which originally cost $5,000. Accumulated depreciation on this equipment at January 1, 2014, was $1,890; 2014 depreciation prior to the sale of equipment was $430. | |
15 | Kenseth sold for $5,310 on account inventory that cost $3,290. | |
23 | Salaries and wages of $6,560 were paid. |
Adjustment data:
1. | Kenseth estimates that uncollectible accounts receivable at year-end are $3,850. | |
2. | The note receivable is a one-year, 8% note dated April 1, 2014. No interest has been recorded. | |
3. | The balance in prepaid insurance represents payment of a $3,810, 6-month premium on September 1, 2014. | |
4. | The building is being depreciated using the straight-line method over 30 years. The salvage value is $31,200. | |
5. | 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. | |
6. | The equipment purchased on December 2, 2014, is being depreciated using the straight-line method over 5 years, with a salvage value of $2,340. | |
7. | The patent was acquired on January 1, 2014, and has a useful life of 9 years from that date. | |
8. | Unpaid salaries at December 31, 2014, total $2,060. | |
9. | Both the short-term and long-term notes payable are dated January 1, 2014, and carry a 10% interest rate. All interest is payable in the next 12 months. | |
10. | Income tax expense was $14,940. It was unpaid at December 31. |
Prepare journal entries for the transactions listed above and adjusting entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
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