Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Kingbird Corporation's balance sheet at December 3 1 , 2 0 2 4 , is presented below. Debits: Cash $ 9 3 , 0 0

Kingbird Corporation's balance sheet at December 31,2024, is presented below.
Debits:
Cash $93,000
Inventory 95,325
Prepaid insurance 17,360
Equipment 117,800
Total $323,485
Credits:
Accounts payable $42,625
Interest payable 7,750
Bonds payable 155,000
Common stock 77,500
Retained earnings $40,610
Total $323,485
During 2025, the following transactions occurred. Kingbird uses a perpetual inventory system.
1. Kingbird paid $7,750 interest on the bonds on January 1,2025.
2. Kingbird purchased $747,410 of inventory on account.
3. Kingbird sold for $1,488,000 cash inventory which cost $818,400. Kingbird also collected $89,280 sales taxes.
4. Kingbird $713,000 on accounts payable.
5. Kingbird paid $7,750 interest on the bonds on July 1,2025.
6. The prepaid insurance ($17,360) espired on July 31.
7. On August 1, Kingbird paid $30,600 for insurance coverage from August 1,2025, though July 31,2026.
8. Kingbird paid $52,700 sales taxes to the state.
9. Paid other operating expenses, $282,100.
10. Redeemed the bonds on December 31,2025, by paying $148,800 plus $7,750 interest.
11. Issued $279,000 of 8%,10-year bonds on december 31,2025, at 103. The bonds pay interest every June 30 and December 31.
Adjustment data:
1. Recorded the insurance expired from item 7.
2. The equipment was acquired on December 31,2024, and will be depreciated on a straight-line basis over 5 years with a $9,400 salvage value.
3. The income tax rate is 30%(Hint: prepare the income statement up income before taxes and multiply by 30% to compute the amount.)
Prepare journal entries for the transactions listed above and adjusting entries.
List of accounts for you to use for the account titles.
Accounts Payable
Accounts Receivable
Accrued Pension Liability
Accumulated Depreciation-Equipment
Bonds Payable
Buildings
Cash
Common Stock
Cost of Goods Sold
Current Portion of Long-Term Debt
Depreciation Expense
Discount on Bonds Payable
Dividends
Equipment
Federal Income Taxes Payable
Federal Unemployment Taxes Payable
FICA Taxes Payable
Gain on Bond Redemption
Income Tax Expense
Income Taxes Payable
Insurance Expense
Interest Expense
Interest Payable
Inventory
Land
Loss on Bond Redemption
Mortgage Payable
image text in transcribed

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_2

Step: 3

blur-text-image_3

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

Emerging Markets And Financial Resilience Decoupling Growth From Turbulence

Authors: C. Hooy, R. Ali, HooyChee-Wooi, S. Ghon Rhee

2nd Edition

1137266600, 9781137266606

More Books

Students also viewed these Accounting questions

Question

Why would unions target health care workers?

Answered: 1 week ago