..ll Fido 2:41 PM x ting Information System and Stat... Question 1 (20 Marks) The work sheet and trial balance of Santos Corporation is reproduced on the following page. The information below is relevant to the preparation of adjusting entries needed to both properly match revenues and expenses for the period and reflect the proper balances in the real and nominal accounts. Instructions As the accountant for Santos, you are to prepare adjusting entries based on the following data, entering the adjustments on the work sheet and completing the additional columns with respect to the income statement and statement of financial position. Carefully key your adjustments and label all items. Round all calculations to the nearest dollar. 1. After an aging of accounts receivable, it was determined that three percent of the accounts will become uncollectible 2. Depreciation is calculated using the straight-line method, with an eight-year life and $1,000 residual (salvage) value. Salesmen are paid commissions of 11% of sales. Commissions on sales for the last week of December have not been paid. 4. The note was issued on October 1, 2013, with interest at 8%, due Feb. 1. 2014. 5. A physical inventory of supplies indicated $280 of supplies currently on hand. 6. Provisions of the company's lease contract specify rent payments must be made one month in advance, with monthly payments of $900/mo. This provision has been complied with as of Dec. 31, 2013 . Fido 2:41 PM x 01 Assignment 2019 Accountin... ... Question 2 (11 Marks) Below is a selection of account balances for Mulcair Ltd. at December 31, 2013: Sales $856,000 Sales returns $20,000 Cost of goods sold $456,000 Advertising expense $42,000 Salaries expense $112,000 Depreciation expense $29,000 Insurance expense $9,000 Administrative expense $10,000 All accounts have their normal balances. Instructions Prepare all necessary closing entries at December 31, 2013 Question 3 - (7 Marks) Tote Ltd. reported the following balances at January 1, 2014: Common shares $420,000 Retained earnings 30,000 Accumulated other comprehensive income 58,000 During the year Tote earned net income of $200,000 and generated other comprehensive income of $70,000. Instructions Prepare a statement of shareholders' equity for the year ended December 31, 2014. Santos Corporation Work Sheet Year ended December 31, 2013 Adjustments Dr. Cr Income Statement Dr. Cr State of fin position r. D Trial Balance Cr. 5,400 4,050 40,000 16,800 1,040 49,000 Accounts Cash Marketable Securities Accounts Receivable Allow. for D. A Inventory Supplies Equipment Accum. Depr.-Equip. Accounts Payable Notes Payable Common Shares Retained Earnings Cost of Goods Sold Office Salaries Sales Commissions Rent Expense Misc. Expense Sales Totals 9,500 4,400 4,250 40,000 25,340 238,520 20.800 29.000 7,200 2,200 414.010 330.102 44010
